US IPO: Venture Global LNG Likely To Raise $3 Billion Through IPO; To Be World's Largest IPO This Year?

Venture Global LNG Inc, one of the largest suppliers of liquefied natural gas (LNG) in the United States, is preparing to file for an initial public offering (IPO) that could raise more than $3 billion. The company, based in Arlington, Virginia, is working with top investment banks Goldman Sachs, JPMorgan Chase, and Bank of America on the offering. While the details of the IPO remain under wraps, Bloomberg reports suggest that it could be one of the largest IPOs of the year globally.

This move comes amid growing demand for LNG and marks a significant milestone for Venture Global, which has rapidly ascended in the highly competitive LNG market. Should the offering proceed as planned, it would place Venture Global among the top IPOs of 2024, an already robust year for public listings. According to Bloomberg, US exchanges have raised around $40 billion from IPOs so far in 2024, a 60% increase compared to the same period in 2023, although still falling short of pre-pandemic levels.

Founded in 2013 by Mike Sabel and Bob Pender, Venture Global LNG has quickly emerged as a major player in the US LNG sector. Initially seen as outsiders to the Houston energy industry, Sabel and Pender's company has grown rapidly, particularly with its Calcasieu Pass facility in southwestern Louisiana, which began LNG exports in 2022. The company is also in the process of launching its second plant, Plaquemines LNG, just south of New Orleans, which will increase its production capacity significantly.

Once operational, Plaquemines LNG will catapult Venture Global to become the second-largest LNG producer in the US, surpassing other major producers, including Cheniere Energy Inc. The company is also working on two other planned projects, CP2 and Delta LNG, though these are still in the permitting stage.

Despite its growth, Venture Global has faced several challenges that could impact its IPO. The company has been unable to fulfil long-term contracts with buyers, including major oil and gas firms like Shell, BP, and Sinopec, due to technical issues at its Calcasieu Pass facility. This has led to delays in the start of these contracts, though Venture Global has continued to ship LNG to the spot market, often at higher prices.

The delays have sparked arbitration between Venture Global, its customers, and its engineering partner, Kiewit Corp., as well as regulatory scrutiny from US and European lawmakers.

In addition to these technical and regulatory hurdles, Venture Global has also been embroiled in legal disputes with former employees. These lawsuits accuse the company of blocking former executives from exercising their stock options, with the most recent suit filed by former executive Jessica Wickett.

IPO Plans

Despite these ongoing challenges, the potential for a $3 billion IPO reflects the growing importance of LNG as a global energy source, especially with the increasing demand for natural gas in Europe and Asia. Venture Global's strong customer base, which includes top energy companies from around the world, positions it as a key player in the global LNG market.

The IPO, if successful, would provide Venture Global with the capital needed to expand its operations further and solidify its position as a leading LNG producer. However, investor confidence will depend on how the company addresses its operational delays and legal battles in the coming months.

*Inputs from Bloomberg*