Venture Global continues to benefit from tightening global natural gas supply. A view of Venture Global's liquefied natural gas export facility in Louisiana.

Key Points A new energy crisis, triggered by the blockade of the Strait of Hormuz and attacks on Qatari LNG facilities, presents a significant profit opportunity for Venture Global. The world is experiencing its second major energy shock in four years. US natural gas exporter Venture Global is positioned to reap enormous profits. Utilizing an unconventional business model designed to capitalize on global supply disruptions, the company garnered billions of dollars in 2022 when Russia cut gas supplies to Europe and buyers scrambled for new sources. This windfall propelled it to become the second-largest LNG exporter in the United States, trailing only Cheniere Energy. Now, a similar scenario is unfolding, offering Venture Global a chance to pursue even greater ambitions: not only to surpass Cheniere but also to overtake the small Middle Eastern nation of Qatar, which possesses one of the world's largest natural gas reserves and is already an LNG export giant. The Strait of Hormuz remains closed to most tankers, disrupting LNG shipments; meanwhile, missile strikes have severely damaged Qatar's gas liquefaction and export infrastructure. This makes Venture Global's available LNG cargoes highly sought-after. Unlike Cheniere, which sells most of its supply under long-term contracts, Venture Global reserves a significant portion for the spot market, where prices can fluctuate substantially. The Strait of Hormuz remains closed to most tankers, impeding global LNG transportation.

"The United States is a very safe, reliable supplier with ample domestic gas reserves and a favorable regulatory environment conducive to continued expansion," Venture Global CEO Michael Sabel said last month on the sidelines of the S&P Global CERAWeek energy conference in Houston. Venture Global went public last year with a valuation of approximately $39 billion. The company positions its Gulf Coast terminals as the solution for meeting the growing demand from Asian and European buyers. The company's stock closed at $15.94 on Monday, having risen about 65% since the end of February when the US and Israel began strikes against Iran, and more than doubling since mid-December. Venture Global stated that over 30% of its supply this year will be directed to the spot market. A significant surge in spot prices could sufficiently compensate for the thin margins on its lower-priced long-term contracts. This is a high-risk strategy, but it appears poised to deliver substantial returns once again. Since the outbreak of conflict, the benchmark Asian LNG price has nearly doubled. The European benchmark price rose last week to nearly $17 per million British thermal units, up from around $10 previously. "They always seem to be 'saved' by war," said Louis Lazara, Head of Research at investment firm Energy Income Partners. "They are going to make a fortune from this situation." Analysts at Goldman Sachs calculated that if European gas prices remain $5 higher than their model forecasts for the rest of the year, Venture Global could realize an additional $3 billion in earnings. The company's ascent has made its co-founders, Sabel and Robert Pender, industry titans. Data from S&P Capital IQ shows they collectively hold about 80% of the company, with each stake currently valued at approximately $15.7 billion. Venture Global LNG CEO Michael Sabel speaking at the S&P Global CERAWeek conference. Sabel and Pender founded the company in 2013 with the idea of combining medium-sized, pre-fabricated LNG modules into a new type of export terminal. They promised this model would be cheaper and faster to build than competitors' on-site construction of refrigeration units. When the Russia-Ukraine conflict plunged Europe into an energy crisis, Venture Global sold spot cargoes to desperate buyers, bypassing some long-term clients, including Shell and BP. The company argued it had no obligation to fulfill those contracts as its first plant was not fully operational. While oil majors were angered, Venture Global disclosed in its IPO filing net profits totaling nearly $7 billion for 2022 and 2023 combined. Since then, the company has entered a period of rapid expansion, partly benefiting from the Trump administration's supportive policies for fossil fuels. The administration reversed a Biden-era freeze on LNG exports, approved new projects including Venture Global's under-construction CP2 export terminal, and demanded allies like Japan increase their gas purchases during trade negotiations. Venture Global reportedly hired several former Trump administration officials and was a major donor, contributing $1 million to the president's second inauguration. At a White House meeting last year promoting corporate investment in the US, Trump specifically mentioned Venture Global's $18 billion investment project in Louisiana, expressing optimism about its prospects. Currently, Venture Global operates two large terminals on the Louisiana coast, with a third under construction. Regulatory filings show the company raised over $33 billion last year through debt issuance and its IPO, and signed eight 20-year supply agreements with customers including Japan's Mitsui, Tokyo Gas, and Spanish utility Naturgy Energy. When conflict with Iran erupted, Venture Global was facing its own set of challenges. Some investors worried about a potential adverse ruling in an arbitration case with BP, and other pending lawsuits could result in billions in losses. The company has previously won lawsuits against Shell and Spain's Repsol, settled with Italy's Edison and an undisclosed customer, while cases with Poland's PGNiG and Portugal's Galp remain ongoing. Qatar's Ras Laffan LNG hub. Airstrikes have impaired its export capacity. Meanwhile, new LNG terminals are emerging along the Gulf Coast, and Qatar had originally planned to increase its export capacity by over 40% starting mid-year. This new supply had raised concerns about a potential glut depressing prices over the next two to five years. But reality has turned out quite different: Airstrikes on QatarEnergy's Ras Laffan hub have reduced its export capacity by 17%, an impact that could last up to five years, and its expansion projects have been announced as delayed. Analysts and industry executives now anticipate a tight global LNG market for the foreseeable future. One risk for Venture Global is that high prices and concerns about supply bottlenecks might cause key Asian growth markets to delay signing new long-term contracts. Sabel said he expects the current supply disruption to be shorter-lived than the 2022 episode. "The natural gas business we are in is critical to the global energy mix; stable, reliable, low-cost gas supplies are fundamental to that," Sabel stated.