Massive New IPO to Hoist Venture Global Into Energy Elite

(Bloomberg) — Venture Global LNG Inc. is poised to join the upper echelon of US energy companies that includes Occidental Petroleum Corp. and PG&E Corp. with one of the world’s biggest IPO’s of the year. 

The Gulf Coast natural gas exporter’s plan to file for an initial public offering as soon as this week could raise more than $3 billion, although details could change, according to people familiar with the matter. JPMorgan Chase & Co.’s research analysts pegged Venture Global’s enterprise value at more than $100 billion, a figure that includes an undisclosed amount of debt.

The timing couldn’t be better for an industry upstart that is in the process of opening a second liquefied natural gas facility in Louisiana and awaiting government permits for two more new complexes. Trump’s fossil fuel-friendly ethos is widely expected to mean an end to the Biden administration’s pause on new export licenses that has stymied the sector.   

The advent of the modern US LNG industry in 2016, enabled by drilling and fracking breakthroughs that unlocked vast troves of shale gas, upended global energy markets by creating a huge alternative source for utilities and chemical makers previously reliant to a handful of producers such as Russia and Qatar. The geopolitical import of that development has not been lost on successive US administrations.

“It’s a good moment for Venture Global indeed to make this transformation,” said Jean-Christian Heintz, a former energy-trading executive who now runs consultancy Wideangle LNG. The incoming Trump administration can be regarded as a protective environment for the US LNG sector, he added.  

When Venture Global’s Plaquemines LNG plant near New Orleans is fully operational, the company will vault ahead of rivals to become the nation’s No. 2 supplier behind Cheniere Energy Inc., whose $47 billion market value puts it roughly on par with oil giant Occidental and PG&E. 

Venture Global’s founders, former investment banker Mike Sabel and Washington DC regulatory lawyer Bob Pender, launched the company outside Houston’s energy capital at a time when the industry was still mostly dominated by the supermajors, national energy companies or longstanding outfits like Cheniere.

Venture Global didn’t respond to multiple requests for comment.

When the Biden administration first announced a pause on permits for new LNG export projects, Venture Global was among those stung hardest. Its plans to greenlight its proposed third project, CP2, which already has signed up long-term customers like Chevron Corp. and Exxon Mobil Corp. stalled. Permission to export, after all, is a key milestone for securing project financing.

In the past year, Chief Executive Officer Sabel has attended events alongside former Japanese Prime Minister Fumio Kishida as well as Germany’s Olaf Scholz, and attended an industry roundtable last spring at Trump’s Mar-a-Lago Club in Florida. 

In its waning days, the Biden administration is now looking to conclude the study of the economic and climate impacts of increased LNG exports that was the lynchpin of the permitting pause. Any findings could complicate Trump administration moves to resume licensing. 

Venture Global also remains locked in arbitration with companies that include its customers at its first LNG plant, Calcasieu Pass in Louisiana, which began producing in 2022 but has not yet started delivering on contracts with longterm customers that include Shell Plc and BP Plc.

The arbitration “presents a legal overhang, something the company definitely wants to avoid going into the IPO process,” said Josef Schuster, founder of IPOX Schuster LLC, a provider of initial-offering benchmark indices. “Any unresolved issues could make the valuation envisioned challenging.”

Matt Kennedy with the IPO research firm Renaissance Capital said that ongoing arbitration wouldn’t necessarily be considered a barrier to going public but could raise concerns among some potential investors. 

“Investors will want to consider how much revenue these customers represent, the nature of the dispute, and how the company thinks it’ll impact the business going forward,” Kennedy wrote in an email. “It’d be unusual to move forward with an IPO, if they really believed a significant portion of their business was about to go away.” 

–With assistance from Bailey Lipschultz, Gillian Tan and Stephen Stapczynski.

(Updates with comment from IPO specialist in 13th paragraph. An earlier version of this story corrected ranking in sixth paragraph.)

stories like this are available on bloomberg.com