VG sees growing demand for 5-year LNG deals

Disruptions and fallout from the Iran war have raised buyer demand for five-year LNG deals, US LNG producer Venture Global (VG) said today after announcing two new medium-term agreements.

The company announced combined sales of 1.05mn t/yr to TotalEnergies and Vitol, both for five-year periods beginning in 2026. VG will sell TotalEnergies 850,000 t/yr and increased the volume on a previously announced contract with Vitol by 200,000 t/yr to 1.7mn t/yr.

"What maybe before (the war) would have been more one- and two-year deals, we're seeing more five-year deals," VG chief executive Mike Sabel said Tuesday on the company's first-quarter earnings call.

Iranian drone attacks in March damaged 12.8mn t/yr of capacity at Qatar's Ras Laffan LNG export terminal, reducing capacity to 64.2mn t/yr. QatarEnergy says could the damage could take three to five years to repair.

Venture Global's production profile has enabled the company to offer more short-term and medium-term supplies. The company's two operating terminals in Louisiana — Calcasieu Pass LNG and Plaquemines LNG — have a combined peak capacity of about 39.6mn t/yr, with the 28mn t/yr CP2 terminal expected to begin producing in the second half of 2027. Uncontracted production from VG's first two terminals and commissioning cargoes from CP2 will allow more medium-length deals, with additional supplies coming from the expansion projects at CP2 and Plaquemines, Sabel said.

Sabel detailed VG's expansion plans to add another 16.4mn t/yr through 2029 (see table). The company raised its planned additions to CP2 to 10mn t/yr, up by 3.6mn t/yr with 12 new liquefaction trains. The company is targeting a final investment decision (FID) on the additions in early 2027, with first production in late 2028.

VG also intends to reach FID on a 6.4mn t/yr expansion at Plaquemines in 2027, targeting first production in 2029 from eight new trains.

With the new production capacity expected through 2029, VG has 33.1mn t/yr of LNG available to sell, most of which will still be sold under long-term contracts, Sabel said. Those typically run for periods ranging from 15 to 20 years.

VG narrows 2026 cargo range

The company tightened its expected cargo range this year to 494-523 shipments from 486-527 previously. About 84pc of those cargoes are already under contract.

To date, VG has realized weighted average liquefaction fees of $4.51/mn Btu for its 2026 cargoes, with a weighted average of $2.20/mn Btu at Calcasieu Pass and $5.63/mn Btu at Plaquemines. The company expects the unsold cargoes to retrieve weighted average liquefaction fees of $9.50-10.50/mn Btu.

VG anticipates selling 550-600 cargoes in 2027, 850-900 cargoes in 2028 and 950-1,000 cargoes in 2029, based on current production schedules.

VG reported first-quarter profit of $625mn on sales of $4.6bn, up from year-earlier profit of $517mn on sales of $2.9bn.

By Tray Swanson