Venture Global: Pulling Delta Project From Approval Process Is Positive; Valuation Unchanged

No-moat Venture Global has withdrawn its Delta project from regulatory approval, citing better uses of capital. Instead of embarking on another large greenfield build, it will instead focus on the brownfield project at Plaquemines that received approvals earlier this year. In liquefied natural gas, and midstream more generally, brownfield projects are more capital-efficient as basic infrastructure and land preparation have already been completed. Shares have run up over the last month, accelerated by the start of construction at CP2. This run appears to be ahead of itself. It was clear the firm would embark on the CP2 project, having laid out substantial capital to secure critical materials. We are leaving our $13 fair value estimate unchanged as we did not have Delta included in our base case.