Venture Global purchases LNG shipping fleet

NEW YORK: Venture Global LNG Inc, the US liquefied natural gas (LNG) exporter embroiled in a dispute with several of its customers, is acquiring nine LNG carriers and expanding its sales operations to market their cargoes.

Venture Global will become the first American LNG producer to purchase a fleet rather than charter or lease vessels, with the first two ships expected to be delivered this year, founder and chief executive officer Mike Sabel said in an interview.

The move opens the door for the company to sell cargoes directly into the spot market without using trading houses or intermediaries, allowing it to boost profits and giving it a fresh edge over competitors.

Venture Global is considering further LNG project expansions outside of the United States and is close to making a final investment, Sabel said during a press briefing, without disclosing a location.

Shell Plc and some of Venture Global’s other customers have accused the company of selling highly profitable spot cargoes from its new Louisiana export facility while dodging obligations to contracted buyers.

Venture Global maintains it has been in compliance with its contracts.

Sabel said that repairs at the facility, Calcasieu Pass, are ongoing and are due to be completed at the end of the year, adding that the company even offered early commissioning cargoes to Shell, which declined them.

Shell didn’t immediately respond to a request for comment sent last Sunday.

The company will add 50 to 100 people to manage the newly acquired fleet of South Korean-built ships and sell the cargoes, Sabel said.

“We’re long LNG, and we mostly right now view this as just selling LNG rather than traditional traders, where they buy LNG from some producers and sell it to others,” he said.

“Over time, we’ll look for opportunities where we will trade cargoes between basins, and that’ll develop naturally.”

Sabel declined to comment on the cost of the specialised ships, which in recent months have fetched prices of as much as US$281mil each.

Venture Global is on its way to becoming one of the biggest United States LNG exporters and is trying to boost flexibility in how it sells its fuel. Its second plant –Plaquemines, in Louisiana – could enter production by this summer, Sabel said.

While most of Venture Global’s exports were sold via long-term contracts, the company has been selling LNG from Calcasieu Pass while the facility undergoes its start-up commissioning process.

That process typically takes several months, and while it continues, plants can sell any fuel produced on the spot market. Once a plant enters full service, long-term contracts must be fulfilled first. Venture Global first began shipping LNG cargoes from the facility in early 2022. — Bloomberg