r/stocks Jun 19, 07:59 AM
Venture Global ($VG): messy LNG stock, but I think the market may be too focused on the lawsuit TLDR: VG is not a clean value stock. It has real debt, real legal risk, and real execution risk. But I think the market may be treating it mostly like a lawsuit story and not giving much credit to the LNG capacity being built. If Plaquemines ramps, BP damages are manageable, and CP2 keeps moving, I think the stock can get valued differently.
I ignored Venture Global ($VG) at first because it looked like a recent IPO with too much debt and too much legal baggage. The Calcasieu dispute also makes management hard to like. This is not an “easy value” idea.
But the more I looked at it, the more I felt like the market may be focusing on the ugly parts and not enough on the actual assets.
Calcasieu Pass is running at 12.4 MTPA. Plaquemines is 28.0 MTPA. CP2 is 29.0 MTPA. If those projects work, VG is looking at almost 70 MTPA of LNG capacity. Cheniere is around 51 MTPA today and has a market cap north of $55B. VG is around a $27B market cap at roughly $11/share and is guiding for $8.2B-$8.5B EBITDA in 2026.
That comparison is what got my attention.
On construction, I do not think VG invented modular LNG. Other companies use modular construction too. The point is more that VG seems to be leaning hard into repeatable mini-trains across Calcasieu, Plaquemines, and CP2. Calcasieu got from FID to first LNG in about 29 months, which is very fast for a greenfield LNG project. But first LNG is not the same as COD. Calcasieu still had a long and messy commissioning period, technical issues, and customer fights. So I would not call modular a proven magic trick. I would say Plaquemines is the test. If it ramps cleaner than Calcasieu, the modular story gets more believable. If it turns into another mess, then the market is right to be skeptical.
The lawsuit issue is the biggest overhang. Calcasieu was in commissioning, Russia invaded Ukraine, LNG spot prices went crazy, and VG sold early cargoes into the spot market instead of delivering them to long-term customers like BP and Shell. That created the arbitration mess.
I do not want to downplay BP. Shell and Repsol went favorably for VG. Edison and Unipec settled. BP is the big one left. From what I understand, BP won on liability, so now the fight is about damages. If the final number is $1B-$2B, that is painful but probably manageable. If it is $5B+, that is a very different problem.
The debt is also obvious. VG has around $37B+ of debt. This is a heavily levered play, not a safe compounder. But they also secured roughly $15B of financing for CP2 and pushed a lot of maturities out into the mid-2030s. So for me the question is not whether they have debt. They do. The question is whether EBITDA ramps fast enough as Plaquemines starts contributing.
The political setup probably helps too. VG and its founders reportedly backed Trump heavily, and the administration has been much friendlier to LNG after reversing the prior LNG export review pause. I do not want to make politics the thesis, because that can chang