Executive Summary / Key Takeaways

• Venture Global is rapidly scaling its LNG production and export capabilities through a differentiated modular construction approach, positioning itself as a significant player in the growing global gas market.
• First quarter 2025 results demonstrated strong operational execution, with revenue increasing 105% year-over-year to $2.9 billion and consolidated adjusted EBITDA rising 94% to $1.3 billion, driven by the ramp-up of the Plaquemines Project and higher LNG prices.
• The Calcasieu Pass facility achieved Commercial Operations Date (COD) in April 2025, marking a significant milestone, while the Plaquemines Project is demonstrating production levels significantly above nameplate capacity during commissioning, with all 36 trains expected online this year.
• Development of the CP2 Project is accelerating, supported by recent regulatory progress (DOE non-FTA authorization, final FERC EIS) and strategic financing, with site work anticipated to begin mid-2025 and first LNG targeted on pace or faster than prior projects.
• The company is strategically prioritizing large brownfield expansions at Plaquemines and CP2 ahead of later projects, leveraging cost and speed advantages, and expects to significantly increase its long-term contract portfolio as a result, while managing risks including market volatility and ongoing customer arbitration.

A New Force in Global LNG

Venture Global, Inc. ($VG) is rapidly emerging as a significant force in the global liquefied natural gas (LNG) market. Focused on the development, construction, and operation of large-scale liquefaction and export facilities along the U.S. Gulf Coast, the company is executing an ambitious strategy to bring substantial new LNG supply to market. Its business model spans the full value chain, from natural gas transport and liquefaction to shipping and direct sales, underpinned by a core strategic emphasis on speed, efficiency, and cost competitiveness. This approach is particularly relevant in a global energy landscape marked by increasing demand for natural gas, driven by factors such as the growth of data centers and tight electricity generation capacity in Europe and Asia, alongside ongoing geopolitical shifts impacting energy flows.

Central to Venture Global's strategy and competitive positioning is its differentiated modular construction technology. Unlike traditional, custom-built LNG facilities, VG employs a "design one, build many" approach utilizing factory-fabricated liquefaction trains and modular components. This technology offers tangible benefits, including accelerated construction timelines – Calcasieu Pass reached COD just 68 months after FID, and the company targets an even faster pace for CP2. The modularity also contributes to potential cost advantages and allows for rapid scaling of production capacity. Furthermore, VG is implementing large nitrogen rejection units (NRUs), described as the largest on the Gulf Coast, specifically engineered to process Permian basin gas with higher nitrogen content. This capability provides access to a diverse and potentially lower-cost gas supply source that poses challenges for facilities without such technology, enhancing VG's competitive edge in securing feed gas. These technological and process innovations are foundational to the company's ability to execute its multi-project development pipeline efficiently and cost-effectively, setting the scene for its growth trajectory.

The company's journey began with the development of the Calcasieu Pass project, its initial facility, which commenced production and sales in the first quarter of 2022. This project served as a critical learning ground, navigating the complexities of commissioning and rectification work. The successful completion of this work culminated in the declaration of Commercial Operations Date (COD) on April 15, 2025. While a significant achievement, the project has also faced challenges, including disputes and arbitration proceedings with certain customers asserting delays to COD and claiming substantial damages, a risk the company is actively managing. Building on the Calcasieu Pass experience, VG advanced its second facility, the Plaquemines Project, which began LNG production and sales in January 2025. The rapid progress at Plaquemines, including the activation of 22 liquefaction trains by May 2025 and production exceeding nameplate capacity, underscores the benefits of the company's repeatable design and execution model.

Operational Momentum and Financial Performance

Venture Global's operational momentum is clearly reflected in its recent financial performance. For the first quarter of 2025, the company reported total revenue of $2.9 billion, a significant 105% increase compared to $1.4 billion in the same period of 2024. This surge was primarily driven by higher LNG sales volumes, particularly from the newly producing Plaquemines Project, and higher weighted average prices for LNG sold. Income from operations grew by 75% to $1.1 billion, up from $617 million in Q1 2024, demonstrating improved operational leverage as production scales. Consolidated adjusted EBITDA also saw robust growth, increasing 94% year-over-year to $1.3 billion.

The Plaquemines Project was a key contributor to this growth, generating $1.186 billion in revenue and $415 million in income from operations in Q1 2025, compared to no revenue and a loss in the prior year period. This performance reflects the successful commencement and ramp-up of LNG sales, with 107.7 TBtu sold at a weighted average price of $11.52/MMBtu. The Calcasieu Pass project continued to generate substantial revenue ($1.638 billion) and income from operations ($902 million), albeit with slightly lower volumes (125.2 TBtu sold) compared to the prior year due to ongoing rectification work that was completed by the end of the quarter. The Direct Sales and Shipping (DSS) segment also saw a significant increase in activity, reporting $481 million in revenue and $32 million in income from operations, driven by the sale of delivered LNG from the company's facilities.

Expenses increased in line with operational scaling. Cost of sales rose significantly due to higher volumes from Plaquemines and increased natural gas prices. Operating and maintenance expenses increased by 131% to $252 million, reflecting the costs associated with the Plaquemines ramp-up, operating the LNG tanker fleet ($49 million), and ongoing work at Calcasieu Pass. Depreciation and amortization expense also saw a substantial increase (209% to $216 million) as $15.8 billion of Plaquemines assets were placed in service from an accounting perspective. While net income decreased year-over-year, this was primarily attributable to non-cash factors, notably an unfavorable change in the fair value of interest rate swaps.

Strategic Expansion and Competitive Positioning

Venture Global's strategic focus extends beyond its operational facilities to the development of future projects. The CP2 Project, the company's third facility, saw significant development progress in Q1 2025, with $834 million in project costs incurred and approximately $5 billion deployed to date for equipment procurement, off-site manufacturing, engineering, and design. Key regulatory milestones were achieved, including conditional non-FTA export authorization from the DOE in March 2025 and the final supplemental EIS from FERC in May 2025, which reaffirmed environmental findings and positions the project for final approval and notice to proceed with on-site construction imminently, expected by mid-2025. The company also secured $3 billion in bridge financing for CP2 to fund pre-FID capital expenditures.

The company is scaling rapidly, with 18 trains commercially operating at Calcasieu Pass, 36 delivered (22 activated) at Plaquemines, and 36 purchased for CP2. Once completed, these three projects are expected to provide over 67 MTPA of peak production capacity. This scale positions Venture Global as potentially the largest source of available LNG capacity in the next three to five years. The company's modular approach is expected to enable CP2 to reach first LNG production on pace or even faster than its prior projects.

In the competitive landscape, Venture Global differentiates itself through its cost structure, speed of execution, and strategic market focus. Compared to established players like Cheniere Energy (LNG), VG exhibits significantly higher recent revenue and EBITDA growth rates (105% and 94% vs. Cheniere's estimated 20% and ~30% in Q1 2025), driven by its rapid scaling and cost discipline. VG's estimated EBITDA margin of 53% (TTM) also appears favorable compared to Cheniere's estimated 42% (TTM). While Cheniere has a strong position with established infrastructure and regulatory expertise, VG's modular design offers potential advantages in operating costs and project timelines. Against integrated energy majors like BP (BP), VG's niche focus on LNG allows for superior growth and profitability margins (VG's TTM EBITDA margin of 53% vs. BP's estimated 7% TTM operating margin), although BP benefits from global scale and supply chain integration. Similarly, compared to energy technology providers like Baker Hughes (BKR) or power generators like Constellation Energy (CEG), VG's direct involvement in LNG production and export provides a different value proposition, focusing on delivering the commodity itself rather than services or broader energy mixes. VG's TTM EBITDA margin of 53% significantly exceeds Baker Hughes' estimated 11% and Constellation's estimated 20% TTM operating margins.

Venture Global's strategic decision to prioritize large brownfield expansions at Plaquemines and CP2 ahead of the CP3 and Delta projects is a direct response to competitive dynamics and market opportunities. These expansions are expected to be larger than initially planned due to favorable balance of plant throughput capacity, offering the potential for faster, lower-cost capacity additions compared to greenfield developments. This strategic shift allows VG to leverage its existing infrastructure and operational experience to bring significant volumes to market more quickly and cost-effectively, enhancing its competitive position. The company feels strong about its ability to win long-term contracts due to its cost and price advantage, noting that market appetite for 20-year SPAs is currently very strong. VG has already upsized one 20-year SPA for CP2 and expects to announce multiple new long-term contracts in the coming quarters, further de-risking its future production.

Outlook and Risks

Looking ahead, Venture Global has provided a revised consolidated adjusted EBITDA guidance for 2025 of $6.4 billion to $6.8 billion. This outlook is based on anticipated cargo exports of 145 to 150 from Calcasieu Pass and 222 to 239 from Plaquemines, assuming fixed liquefaction fees of $6 to $7 per MMBtu for cargoes yet to be sold, consistent with current market forwards. The company has already contracted approximately 60% of its anticipated Q2 through Q4 2025 production, which is expected to reduce the guidance's sensitivity to market price fluctuations as the year progresses. Key operational milestones anticipated include bringing all 36 Plaquemines trains online this year and commencing site work for CP2 by mid-2025, subject to regulatory approvals.

Despite the positive outlook and operational momentum, Venture Global faces significant risks. Market volatility in LNG prices remains a challenge, particularly impacting the profitability of uncontracted cargoes. The company requires substantial additional capital to fund its extensive project pipeline, and securing this financing on acceptable terms is critical. Construction and operational risks are inherent in large-scale energy projects, including potential cost overruns, delays, and performance issues. Regulatory and political factors, including potential opposition to permits, could impact project timelines. Geopolitical uncertainties could affect global demand and market prices for LNG.

A particularly notable risk is the ongoing legal disputes and arbitration proceedings with certain customers regarding the Calcasieu Pass COD. Customers are claiming significant damages, and while the company believes its liability is subject to contractually defined caps, some customers dispute the applicability of these limitations, seeking amounts in excess of the $1.6 billion aggregate cap. The outcome of these disputes could have a material impact on the company's financial condition. Macroeconomic factors such as potential tariffs on imported equipment and labor market shortages also pose risks, although the company believes its modular design and procurement strategies help mitigate some of these impacts.

Conclusion

Venture Global is executing a high-growth strategy centered on its modular construction technology and rapid development of LNG export capacity. The strong financial results in Q1 2025, driven by the successful ramp-up of the Plaquemines Project and the achievement of COD at Calcasieu Pass, demonstrate the effectiveness of its operational model. With significant capacity additions planned at Plaquemines and CP2, supported by strategic financing and regulatory progress, the company is well-positioned to capitalize on the increasing global demand for natural gas. Its technological edge in modularity and specialized processing capabilities provides a competitive advantage in speed and cost efficiency compared to traditional players. While challenges such as market volatility, the need for capital, and ongoing arbitration proceedings present risks, the company's focus on securing long-term contracts and leveraging its brownfield expansion opportunities underscores its strategic intent to de-risk future growth and solidify its position as a major LNG exporter. Investors will be closely watching the continued execution of the Plaquemines ramp-up, the progress towards FID and construction at CP2, and the resolution of customer disputes as key indicators of the company's ability to realize its full potential.