By Laura Sanicola

Citi on Friday slashed its price target for Venture Global from $16 to $9 per share, warning that weak liquefied natural gas prices and more losses in arbitration cases against customers could lead to a "prolonged overhang" for the stock.

Shares of the Arlington, Va., based natural gas exporter are down nearly 70% from the company's initial public offering in January, and are currently trading around $7 per share.

Venture Global is one of several U.S. companies ramping up gas exports, and is anticipating higher demand from countries switching from coal to gas, as well as rising global electricity use. By 2030, the U.S is projected to export about 21.5 billion cubic feet per day of LNG, nearly double 2024 levels and about one-third of all global LNG volumes, according to the U.S. International Energy Agency.

That increase, along with export growth in other countries, should send global gas prices meaningfully lower. This will weaken margins for exporters such as Venture Global, Citi analysts led by Spiro Dounis said in a research note. Citi, which has a neutral rating on Venture Global stock, estimates lower prices will impact the company's valuation by $2 per share.

Venture Global constructs export terminals on the U.S Gulf Coast, liquifying natural gas and selling it to long-term contracted customers and on the spot market, where customers typically pay extra for immediate delivery when they need the gas, such as during a cold weather snap.

It gained prominence for its speedy "modular" construction of LNG terminals, which allow it to make more money by selling gas at a higher cost on the spot market before its terminals are fully commercially operational.

However, that practice landed Venture Global in hot water after it kept contracted customers waiting for gas in 2022 from its Calcasieu Pass terminal, which was under construction in Louisiana at the time. Venture Global instead sold the gas from the terminal on the lucrative spot market that year after Russia's invasion of Ukraine and subsequent sanctions on Russian energy sent prices soaring.

Venture Global won an International Chamber of Commerce arbitration against Shell earlier this year after the European energy giant accused the exporter of violating contractual obligations by selling cargoes on the spot market. Venture Global, in turn, argued that since its terminal was still ramping up and not fully commercially operational, it was not violating any customer contracts.

However, Venture Global lost a separate $1 billion arbitration against BP, who made a similar accusation, and faces ongoing legal and financial pressure from other customers. Shell, who was ordered to pay Venture Global's legal fees, is currently challenging the outcome of its arbitration in a New York court.

Citi estimates the roughly $5 billion in arbitration liabilities from Shell, BP, and other customers could reduce Venture Global's valuation by another $2 per share. The uncertainty on arbitration outcomes is expected to weigh on share buyback expectations, resulting in another $3 per share drag, the Citi team says.

"At current trading levels, we estimate the stock is currently imputing lower LNG margins, minimal future growth, and/or additional negative arbitration outcomes beyond what the company has stated," they wrote.

Despite this weakness, Venture Global is planning to expand its LNG footprint: Last week, the company asked U.S. regulators for permission to increase LNG exports from its Plaquemines LNG terminal located in Louisiana by 40%. It is also building another significant export facility across from Calcasieu Pass.

Citi now values Venture Global's shares at 16 times 2027 earnings before interest, taxation, depreciation, and amortization, elevated versus its peers due to expansion projects not fully reflected by 2027.

Venture Global stock ended Friday up 3%. Out of the 17 analysts tracked by FactSet who cover the stock, 8 rate it Buy, none rate it Sell, and 8 rate it Hold, with an average price target of $14.

Write to Laura Sanicola at laura.sanicola@barrons.com

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November 22, 2025 12:02 ET (17:02 GMT)

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