Venture Global’s Gas Plant Is Done

Venture Global Inc. is a liquefied natural gas (LNG) producer in Louisiana with an innovative approach to building LNG plants, one that involves “mid-scale factory-fabricated liquefaction trains” that are “assembled off-site at manufacturing and fabrication facilities in Italy and then shipped to our project sites fully-assembled and packaged for installation,” rather than the traditional approach of building everything onsite.1 This is efficient as a matter of engineering and construction, but it is also efficient as a matter of financial engineering and contract construction.

The way you finance an LNG plant is that you enter into contracts with customers — big energy companies — to sell them LNG at fixed prices once your plant is completed. You agree on the prices, you raise money, you build the plant, and then, a few years later, the plant is completed and you have to start delivering LNG. If, in the interim, Russia has invaded Ukraine and global natural gas prices have gone up, you will be sad about having to deliver gas at the fixed prices you agreed on years ago.