CEO: Venture Global to sign multiple 20-year LNG contracts in coming quarters

Mariel Alumit

4 months ago

ENB Pub Note: I have included a summary of the earnings report for Venture Global. Investing in LNG is a good long-term play, and there are good long-term contracts that have been signed in the reports.

Key Points

Research suggests Venture Global’s Q4 2024 revenue was $1.5 billion, down from $1.6 billion in Q3 2023, with net income at $871 million.
It seems likely that full-year 2024 revenue was $5.0 billion, with net income at $1.5 billion, showing a decline from 2023.
The evidence leans toward strong 2025 guidance, with expected EBITDA of $6.8–$7.4 billion, driven by LNG export growth.
The stock fell nearly 20% post-earnings, possibly due to revenue drops, despite operational milestones like Plaquemines LNG production.

Comprehensive Analysis of Venture Global’s Recent Earnings Report for Q4 and Full Year 2024

Venture Global, Inc. (VG), a leading provider of U.S. liquefied natural gas (LNG) with operations across the LNG supply chain, released its fourth-quarter and full-year 2024 earnings report on March 6, 2025. This report, marking the company’s inaugural earnings disclosure, provides insights into its financial performance, operational achievements, and future outlook, amidst a dynamic energy market influenced by global demand and geopolitical factors. The following analysis synthesizes key financial metrics, operational milestones, and market reactions, drawing from multiple sources to ensure a comprehensive overview.

Financial Performance

The earnings report highlighted a mixed financial picture for 2024, with significant year-over-year declines in revenue and EBITDA, offset by a strong net income recovery in Q4 and robust guidance for 2025. Key financial metrics include:

Q4 2024 Results: Revenue was reported at $1,524 million, a decrease from $1,632 million in Q4 2023, as noted in the earnings presentation . Net income surged to $871 million, a significant improvement from a loss of $50 million in Q4 2023, reflecting operational efficiencies. Consolidated Adjusted EBITDA was $688 million, down from $813 million in the prior year, indicating pressure on profitability.
Full Year 2024 Results: Total revenue for the year was $4,972 million, a substantial decline from $7,897 million in 2023, as per the Business Wire press release . Net income was $1,475 million, compared to $2,681 million in 2023, while Consolidated Adjusted EBITDA reached $2,104 million, down from $5,155 million, highlighting challenges such as lower international LNG prices and increased project costs.
Return on Equity (ROE): For FY 2024, ROE was calculated at 41.3%, based on Consolidated Net Income divided by average Shareholders’ Equity, as detailed in the earnings presentation, indicating strong profitability relative to equity.

The revenue decline, particularly the 737% drop mentioned in some analyses , appears to be a typo, as the actual decrease was more moderate, aligning with industry trends of lower LNG prices and reduced export volumes compared to the previous year.

Operational Achievements

Venture Global made significant strides in its operational capabilities, particularly with the ramp-up of new facilities and expansion projects, which are critical for future growth:

Plaquemines Project Milestones: The Plaquemines LNG facility achieved first production on December 13, 2024, and exported its first cargo on December 26, 2024, as highlighted in the earnings report . This rapid timeline positions it as one of the fastest greenfield projects to reach production, alongside the Calcasieu Pass facility, which commenced operations in January 2022.
LNG Export Volumes: For Q4 2024, the company exported 32 LNG cargos, totaling 128 TBtu, compared to 40 cargos and 147 TBtu in Q4 2023. For the full year, 140 cargos were exported, totaling 501 TBtu, slightly down from 143 cargos and 510 TBtu in 2023, reflecting stable operational performance despite market challenges.
CP2 Development: The company invested $4.0 billion in the CP2 project through December 31, 2024, covering construction, procurement, engineering, and design. With 12 of 36 LNG trains already in fabrication, CP2 is expected to add 28 MTPA of production capacity. Additionally, the Federal Energy Regulatory Commission (FERC) approved an uprate to 27.2 MTPA from 24.0 MTPA, enhancing future output potential.
Fleet Expansion: Venture Global deployed its first two LNG tankers, Venture Gator and Venture Bayou, in 2024, strengthening its shipping capabilities and supporting export growth.
Safety Metrics: The company reported a Total Recordable Incident Rate of 0.10 across over 25 million manhours, significantly below the national average of 1.9, underscoring its commitment to operational safety.

These operational achievements, particularly the activation of 52 LNG trains across Calcasieu Pass (18) and Plaquemines (34), with all activated trains demonstrating pro rata production levels of approximately 140% of nameplate capacity, position Venture Global for increased market share in the global LNG market.

Future Outlook and Guidance

Looking ahead, Venture Global provided optimistic guidance for 2025, signaling confidence in its growth trajectory:

2025 EBITDA Guidance: The company projects Consolidated Adjusted EBITDA of $6.8 billion to $7.4 billion, a significant increase from $2.1 billion in 2024, as outlined in the earnings presentation. This guidance includes a non-controlling interest share of $215 million to $235 million, reflecting expected operational scale-up.
LNG Export Plans: For 2025, Venture Global anticipates exporting 140–148 cargos from the Calcasieu Pass facility and 219–239 cargos from the Plaquemines facility, indicating a substantial increase in export volumes and revenue potential.
Project Timelines: Commercial Operations Date (COD) is anticipated for Calcasieu Pass on April 15, 2025, with Plaquemines Phase I expected in Q4 2026 and Phase II in mid-2027, aligning with long-term capacity expansion goals.

This outlook suggests that Venture Global is well-positioned to capitalize on growing global demand for LNG, particularly in Europe, where it has been a key supplier to allies, as noted by CEO Mike Sabel in the earnings call .

Capital Structure and Investments

The company also detailed significant capital activities, reflecting its strategy to fund growth:

Capital Investments: Cumulative investments through 2024 included $4.0 billion for CP2, $1.2 billion for the LNG vessel fleet, and $960 million for midstream assets, as per the earnings presentation.
Debt Repayments: In Q4 2024, Venture Global repaid $178 million on the Calcasieu Pass Construction Loan and the remaining portion of a $1.7 billion Plaquemines Phase II Equity Bridge Loan, strengthening its balance sheet.
Preferred Equity Issuance: The company issued $3.0 billion in Fixed Rate Reset Cumulative Redeemable Perpetual Preferred Stock in September 2024, enhancing financial flexibility for ongoing projects.

These financial maneuvers underscore Venture Global’s strategy to balance growth investments with debt management, supporting its expansion plans.

Market Reaction and Analyst Perspectives

The market reaction to the earnings report was notably negative, with the stock price falling nearly 20% in pre-market trading on March 6, 2025, as reported in multiple sources . This drop, pushing the stock near its 52-week low of $13.28, may reflect investor disappointment with the significant revenue and EBITDA declines for 2024, despite beating Q4 earnings estimates. However, some analyses suggest a 3% rise in pre-market trading, which appears to be a conflicting report and may indicate a typo or misinterpretation . Given the consensus from multiple sources, the 20% decline is more likely accurate, driven by short-term concerns over 2024 performance.

Analyst reactions, as inferred from InvestingPro analysis, indicate the stock was trading above its Fair Value, suggesting potential undervaluation post-drop, which could attract long-term investors . The strong 2025 guidance and operational milestones may mitigate some concerns, but the market’s focus on immediate financial results likely contributed to the negative reaction.

Challenges and Risks

Venture Global faces several risks that could impact future performance, as outlined in its Annual Report on Form 10-K filed with the SEC on March 6, 2025, accessible at www.sec.gov. These include:

Volatility in LNG pricing, affecting revenue.
Supply chain disruptions, particularly for construction materials.
Regulatory changes, such as potential shifts in export policies.
Fluctuations in global demand, influenced by geopolitical tensions and energy market dynamics.

These risks are particularly relevant given the company’s reliance on international markets and ongoing project developments.

Conclusion

Venture Global’s Q4 and full-year 2024 earnings report reflects a challenging year with significant revenue and EBITDA declines, driven by lower LNG prices and increased project costs. However, the company achieved critical operational milestones, such as first production at Plaquemines and progress on CP2, positioning it for future growth. The strong 2025 guidance, with projected EBITDA of $6.8–$7.4 billion and increased export volumes, suggests confidence in scaling operations. The stock’s 20% drop post-earnings highlights short-term market concerns, but long-term investors may find value in the company’s expansion strategy and robust outlook. The energy sector’s volatility and geopolitical factors will continue to shape Venture Global’s trajectory, making its ability to deliver on 2025 targets crucial for regaining investor confidence.

The following table summarizes key financial and operational metrics:

Category	Q4 2024	FY 2024	FY 2025 Guidance
Revenue ($MM)	1,524	4,972	–
Net Income ($MM)	871	1,475	–
Consolidated Adjusted EBITDA ($MM)	688	2,104	6,800 – 7,400
LNG Volumes Exported (Cargos)	32	140	Calcasieu: 140-148, Plaquemines: 219-239
ROE	–	41.3%	–

Key Citations

Q1 2025 Earnings Call

Sabel revealed this during Venture Global’s first-quarter earnings call on Tuesday.

“We’re very active in a significant number of negotiations for long-term contracts at this point, mostly all 20-year terms,” Sabel said.

“And so we expect to be executing and reporting on multiple 20-year contracts in the incoming quarters. And we’re really pleased with the demand and where we stand in those negotiations. So, the market and the investors in our company should expect to see announcements for more 20-year deals,” he said.

Last month, Venture Global launched commercial operations at its 10 mtpa Calcasieu Pass LNG terminal in Louisiana, some 68 months from its final investment decision and 38 months after production start.

The company continues to progress with the commissioning of the Plaquemines LNG project, which features 36 modular units, configured in 18 blocks. Each train has a capacity of 0.626 mtpa.

Venture Global recently also received approval from FERC to boost the capacity of its Plaquemines LNG terminal to 27.2 mtpa.

In addition to these facilities, Venture Global is also working to take a final investment decision on the CP2 project.

The CP2 LNG plant will be located next to Venture Global’s existing Calcasieu Pass liquefaction plant in Louisiana.

CP2 is expected to have peak production capacity of up to 28 mtpa.

Venture Global estimates that the total project costs for the CP2 project, including both phases, will range from about $27 billion to $28 billion.

In March, Venture Global announced it had launched the formal FID process for CP2 LNG, while FERC recently issued a final supplemental environmental impact statement for the project.

Sabel said during the call that Venture anticipates mobilizing to the site and beginning site works and dredging by the middle of this year, subject to obtaining FERC approval.

To date, the initial phase of CP2 LNG has been sold through 20-year SPAs with ExxonMobil, Chevron, Jera, NFE, Inpex, China Gas, SEFE, and EnBW.

Since Plaquemines LNG is producing significantly above its upper capacity range, or about 140 percent of capacity, Venture Global expects “to see that or even a little bit better for CP2,” Sabel said.

“So, we have built and are building more production capacity than we expected and planned for even just a few months ago,” he said.

“And so our appetite to signing more long-term contracts is greater than it was until recently. So, we are intending to do more 20-year contracts than we had been planning,” he said.

“Appetite is very strong in the market right now. I would say it’s better than it has been for the last several years. And our ability to win contracts with our cost and price advantage in the market is very strong,” Sabel said.

He said that Venture Global expects to increase to increase its 20-year contract portfolio with “existing, but also with new customers as well.”

Sabel said that talks include traditional buyers from Northwest European and Northeast Asian markets, as well as other regions.

“It’s still tilted a little bit towards European buyers. But the Asian buyers, and that includes multiple countries in Asia are still very active,” he said.

Source: Lngprime.com

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