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Shares of Venture Global plunged more than a quarter in early trading after the liquefied natural gas producer reported a revenue decline from lower LNG sales and exports.
The Virginia-based company, which just listed publicly in January, reported that fourth-quarter revenue fell 7 per cent to $1.5bn. The company said cargoes of LNG exports declined 18 per cent in the fourth quarter, with sales of LNG volumes falling 13 per cent in the three months to the end of December.
Full-year revenue came in at about $5bn, missing analysts’ expectations for $5.2bn.
Venture Global also reported a surprise increase in costs for its Plaquemines LNG facility of as much as $1.3bn. The new estimate does not include the impact of tariffs, which it said could raise costs further.
Venture Global’s IPO broke below its listing price on its first day of trading. Shares have kept sliding, wiping out more than half of its market value since its float. Shares were down 21.2 per cent in early trading on Thursday.
Some analysts had attributed the stock’s most recent decline to it being overvalued. But investors were also spooked by the ongoing arbitration with customers Shell and BP over accusations that it failed to deliver shipments under long-term supply contracts and instead sold them on high-priced spot markets.
The dispute has raised investor concern over Venture Global’s ability to attract new and existing customers to long-term contracts that are crucial to build its capital intensive terminals.
Total chief executive Patrick Pouyanné told Reuters that he did not “want to deal with these guys, because of what they are doing . . . I don’t want to be in the middle of a dispute with my friends, with Shell and BP.”
But Mike Sabel, Venture Global’s CEO, said there had been strong demand for 20-year contracts, as long-term fuel prices were “extremely attractive”.
The Trump administration has been supportive of the US LNG industry and has pressed foreign leaders to commit to buying more of the country’s super-chilled fuel. Sabel said the current permitting environment was “likely the best in decades”, adding that he was “bullish” on its ability to permit expansion plans.
Venture Global is still awaiting government approval for the CP2 LNG facility on Louisiana’s gulf coast, but Sabel said the company felt “pretty good” based on what had been said “privately and publicly”.
The LNG producer swung to a profit of $871mn, compared with a $50mn loss in the year ago quarter.
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