Venture Global Wins Arbitration With Shell

Venture Global does not lack ambition. Its development plan envisions a vertically integrated liquefied natural gas producer that controls substantial global market share. Core to this plan is Venture maximizing the sale of LNG volumes going toward the spot market, rather than selling under long-term agreements. We largely agree with this strategy as Venture has invested heavily in building out facilities at the top of the cycle. To make adequate returns, it must maximize sales on short-term agreements that produce $1-$3/million British thermal units more at midcycle than under long-term agreements. This structure also produces extremely volatile performance, with operating margins swinging from 62% in 2023 to an expected low of 19% in 2027.