Venture Global, the second-largest exporter of liquefied natural gas in the United States, has raised $1.75 billion, marking the first big initial public offering (IPO) of President Donald Trump’s second term as investors bet on his plan to boost U.S. energy production.
The move has sent ripples across the global LNG market, with significant implications for Nigeria, one of the world’s top LNG producers.
Impact on global LNG market
Venture Global’s IPO marks a pivotal moment for the U.S. LNG industry.
BusinessDay’s findings showed LNG is expected to play an increasingly central role in global energy markets in the years ahead, as nations seek a cleaner-burning alternative to oil and coal.
The US’s position as the world’s largest supplier of fuel is poised to grow even stronger, with President Donald Trump directing his Energy Department to resume reviewing applications for LNG export terminals.
Read also: Bonny protests: NLNG reacts, recommits to Train-7 community projects kick-off
The move reverses a moratorium Joe Biden ordered that disrupted plans for multi-billion dollar export projects by Venture Global and others.
Venture Global is attempting to build a more integrated supply chain than some of its peers. It has secured capacity at facilities in the UK and Greece, where its LNG would be re-gasified and sent to end users, a strategy that would allow the company to win greater market share, according to its filings.
Venture Global is the second-largest exporter of liquefied natural gas (LNG). In the United States, one of Trump’s first moves after his inauguration was to sign an executive order to end a moratorium on new LNG export permits, which cleared an obstacle to Venture Global’s expansion plan.
The Arlington, Virginia-based company, sold 70 million shares for $25 each, according to a detailed IPO seen by BusinessDay.
The pricing gives the company a market value of $60.5 billion, based on the number of outstanding shares listed in an earlier filing, well below its original target of $110 billion.
People close to the deal said the size and timing of the cut underscored investors’ nervousness about elevated valuations in the US stock market, even as Wall Street bankers were gearing up for a flurry of flotations.
Venture Global had a net income of $756 million in the nine months ended Sep 30 2024 on revenue of $3.4 billion, versus a net income of $3.6 billion on revenue of $6.3 billion in the same period in 2023, according to the filing.
The IPO intensifies the spotlight on Venture Global’s founders, Mike Sabel, 57, and Bob Pender, 71, who are initially viewed as outsiders to the established energy industry.
Findings showed Venture Global has built strong ties with the new Trump administration.
Last April, Sabel attended a dinner hosted at Mar-a-Lago for oil and gas executives, where Trump allegedly requested $1 billion in campaign donations in return for ripping up environmental policies.
The company contributed $1 million to Trump’s inauguration campaign, according to data from Financial Times.
Read also: Portugal to import more Nigerian LNG, aims to end Russian supply — Reuters
Impact on Nigeria’s LNG Sector
For Nigeria, the IPO could have a profound effect on its own LNG industry.
Nigeria is home to the world’s ninth-biggest gas reserves and one of the world’s largest LNG export terminals.
Currently, Nigeria has six operational LNG terminals; nine more are proposed, with LNG construction investment totalling N28.3 trillion ($18.5 billion).
The success of Venture Global could serve as a model for Nigerian companies looking to tap into the capital markets, potentially paving the way for a new era of investment in Nigeria’s LNG sector.
On January 21, Portugal announced plans to increase purchases of LNG from the United States and Nigeria as it aims to end already dwindling supplies from Russia.
Portugal imported 49,141 gigawatt-hours (GWh) of natural gas in 2024, of which around 96 percent was LNG, data from electricity and gas grids operator REN shows.
Nigeria accounted for 51 percent of those LNG deliveries, about 40 percent came from the United States and around 4.4 percent from Russia.
“Portugal is now practically independent of Russian gas … but we want to reduce this figure further by importing more gas from Nigeria and the United States,” Graca Carvalho told a panel at the World Economic Forum in Davos, according to economic website ECO.
Last September, UTM Offshore, a Nigerian company, obtained a license to construct its 2.8-million-ton-per-annum floating LNG (FLNG) facility – the first of its kind in Nigeria.
The facility will produce LNG, LPG and condensate from flared gas captured at ExxonMobil- operated Oil Mining Lease 104.
Nigeria’s LNG production capacity has faced challenges in recent years, with issues such as aging infrastructure, underinvestment, and regulatory delays hindering growth.
Experts say Venture Global’s IPO could inspire the Nigerian government and private investors to expedite the development of new LNG projects, which are crucial for the country’s economic diversification efforts.
Read also: Africa requires $200bn yearly for energy, climate goals – NLNG
Moreover, Nigeria’s LNG exports could become more competitive on the global market as U.S. LNG producers, including Venture Global, ramp up production.
While Nigeria is a well-established player in the LNG space, the surge in U.S. LNG production could lead to greater competition for markets, especially in Europe and Asia, where demand is expected to remain high.
Join BusinessDay whatsapp Channel, to stay up to date
Open In Whatsapp
