A promising strategy to address the energy crisis is Venture Global

Venture Global, an LNG producer, appears to be a promising bet on the impending energy crisis and is poised for a windfall from rising natural gas prices

Similar in scope to the crisis that erupted in 2022 when Russia invaded Ukraine and cut off Europe's gas supply, the Middle East conflict has caused a shock to the world's oil and gas supply.

In some ways, if this conflict continues, it could affect the world's hydrocarbon markets even more. In the months and years following the start of the conflict in Ukraine, buyers turned to Middle Eastern suppliers of liquefied natural gas (LNG) to replace Russian imports as nations turned away from Russian gas supply.

About 20% of the world's LNG supply came from shipments from Qatar and the United Arab Emirates (UAE) at the start of the year, but the de facto closure of the Strait of Hormuz has since cut off these supplies from the market.

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Start your trial Now that the supply has been cut off, buyers have rushed to secure new cargoes at exorbitant premiums. Constructing infrastructure to transform natural gas into the super-cooled liquid product is a difficult task. A mid-sized facility can cost about £10 billion, but most manufacturers build as big as they can to maximize economies of scale.

Price tags of £50 billion or more are thus typical. Because of the size of these projects, the majority of the output is sold on long-term contracts before production even starts, ensuring that backers have a return on investment before making billion-dollar investments.

Long-term contracts account for about 70% of LNG production worldwide, which presents challenges for consumers who are now compelled to look elsewhere for the energy they require. Because of this, prices have skyrocketed. In just one week following the start of the conflict, natural gas prices in Europe rose by 70%.

The fastest gun in the West is Venture Global.

Venture Global (NYSE: VG) comes in. Just over ten years ago, former banker Mike Sabel and attorney Bob Pender founded the company, which has since expanded from nothing to become one of the biggest LNG producers in the US, surpassing both Australia and Qatar as the fuel's largest exporters.

The founders of Venture Global, who still own about half of the business, decided to adopt a different strategy after considering the expense of constructing conventional LNG facilities. In order to enable factories to fabricate parts off-site, they changed the design to concentrate on smaller modular units.

The industry had doubts, but Venture quickly disproved them. Its first project, Calcasieu Pass, was one of the fastest LNG plants ever built, going from a final investment decision in 2019 to exporting fuel in just 29 months (though, like most LNG projects, it exceeded its budget by £1 billion).

Venture intends to produce slightly more than half of the 60 million tonnes of LNG that peer Cheniere Energy produces annually, making it the second-largest LNG producer in the United States. Ninety percent of this is sold under long-term agreements. Due to additional capacity from the US and Qatar, it is anticipated that the total global supply will increase to between 460 and 484 million tonnes in 2026.

In contrast to Cheniere, Venture has only fixed 70% of its sales. The remaining 30% can be sold at the spot market, potentially generating a profit for the company. In fact, management has stated that the full-year 2026 adjusted Ebitda will be affected by £575 million to £625 million by a £1 point00/MMBtu change in fixed liquefaction fees, which is the difference between the cost of buying natural gas in the US and selling LNG overseas.

The company has stated that, assuming a fixed liquefaction fee range of £5.00 to £6.00/MBtu, it anticipates full-year Ebitda of £5.2 billion to £5.8 billion. The difference between the US Henry Hub benchmark for natural gas and the European TTF/Asian JKM benchmarks has increased to as much as £15/MMBtu due to the recent market volatility.

Although the market hasn't taken this windfall into account when valuing the company, Venture's choice to leave 30% of production for sale on the spot market may prove profitable this year. Investment bank UBS analysts have estimated that the stock is currently trading at a forward, 2026 price-to-earnings (p/e) multiple of just 9.6.

Prior to the recent conflict, these numbers were combined with the company's fourth-quarter 2025 results, which were made public at the end of February. According to the company's long-term output growth forecasts and fourth-quarter outlook, UBS projected that revenue would increase from £11 billion in 2026 to almost £19 billion by 2029, with net income roughly doubling during that time. Although all of these figures are outdated, they offer a reasonable representation of Venture's projected growth in a "normal" market.

Since its initial public offering (IPO) in early 2025, lawsuits have been a contributing factor in Venture's low cost. In 2022, Venture rerouted some of the cargoes intended for its clients with long-term supply agreements, like Shell, BP, and Repsol, to other clients willing to pay higher prices on the spot market after the conflict in Ukraine caused gas prices to soar globally. Out-of-pocket traders filed a lawsuit, seeking up to £6 billion. After years of arbitration, the clouds have begun to lift in recent months. Despite losing a case against BP, Venture has eliminated a great deal of uncertainty by winning cases against Shell and Repsol.

Don't worry about the debt.

Global Ventura.

The company's debt is another element that seems to be creating an overhang on the stock. With a net debt-to-Ebitda ratio of five at the end of 2025, it had minimal flexibility. However, the company has the chance to significantly reduce these liabilities with a cash infusion anticipated this year due to the impact of higher natural gas spreads. The stock appears to be a promising bet on the impending energy crisis.