Venture Global LNG shares surge as company announces Plaquemines ramp-up

By Tanay Dhumal and Curtis Williams

May 13 (Reuters) - Venture Global LNG VG.N shares jumped nearly 11% on Tuesday after the company announced it expects its entire Plaquemines LNG export facility in Louisiana to be operating by year end, news that eclipsed its disappointing quarterly results.

Venture Global CEO Mike Sabel told analysts on a conference call that he expects Phase 1 of the Plaquemines plant to be operating by the end of May, with the rest up by the end of the year, even as formal commissioning continues for years.

That means the company will be able to sell hundreds of cargoes from the facility on the highly profitable spot market into 2027, rather than sell LNG to long-term customers at relatively low contracted prices.

Liquefaction fees for Plaquemines commissioning cargoes are expected to average over $7 per million British thermal unit (mmBtu) compared with $2.25 for the long-term contracted cargoes at its Calcasieu Pass export facility, Sabel said.

"In Plaquemines we are going to be triple the production by the end of this year", he said on the call.

Venture Global shares rose 8% to close at $10.72.

The company is the second-largest U.S. LNG exporter behind Cheniere Energy LNG.N, and has been responsible for almost all additional U.S. export capacity since 2023, helping make the country the world's largest exporter of the superchilled gas.

Earlier in the session Venture Global shares fell after the company lowered its current-year forecast and said it missed first-quarter estimates for core profit due to higher operating costs at LNG projects.

The company has been grappling with high project costs, prompting it to raise the Plaquemines project's budget forecast in March.

U.S. President Donald Trump's import tariffs on steel and aluminum are likely to impact only 1% of Venture Global's construction costs but the company continues to manage rising labor costs, Sabel said.

Venture Global lowered its current-year adjusted core profit, or EBITDA, forecast to between $6.4 billion and $6.8 billion from between $6.8 billion and $7.4 billion. The midpoint was still above Wall Street expectations of $6.54 billion, according to data compiled by LSEG.

Its adjusted core profit for the first quarter was $1.35 billion, missing estimates of $1.38 billion, as per LSEG data, weighed down by higher operating costs related to ramping up LNG production at the Plaquemines project and commercialization of the Calcasieu project.

The company's quarterly operating and maintenance expenses more than doubled from a year earlier to $252 million.

"We view the release as mixed ... somewhat overshadowed by a larger downward revision to FY25 EBITDA guidance than what might have been expected, though tariff impacts to CP2 are minimal," Scotiabank analyst Brandon Bingham said.

Sabel said in the earnings call that all customers of Venture Global's other facility at Calcasieu Pass have received contracted cargoes since the facility started commercial operations in April, after more than three years of commissioning.

The company said it was also well on its way to giving the financial go-ahead to its CP2 project, also in Louisiana, and estimates it will sell over 550 commissioning cargoes from that project before it has to move to commercial operations.

CP2 is expected to produce 28 million tonnes per year, making it the single largest LNG export plant in the U.S.

With larger volumes from CP2 and Plaquemines than originally expected, Sabel said the company will make announcements in the coming months of more long-term contracts and that it was speaking mainly to European and Asian buyers.

"We have built and are building more production capacity than we expected and so our appetite for signing more longer term contracts is greater than it was," said Sabel.