By Arasu Kannagi Basil
(Reuters) -Venture Global is seeking up to $110.38 billion valuation in its New York initial public offering, the second-largest U.S. liquefied natural gas producer said on Monday, setting the stage for the first blockbuster stock market flotation in 2025.
The Arlington, Virginia-based company is seeking to raise up to $2.30 billion in what is likely to be the largest listing by an energy company in the United States in more than a decade.
Conoco's $4.4 billion offering in 1998 was the biggest energy New York IPO ever by a U.S.-based company, followed by Kinder Morgan (NYSE: KMI )'s $3.3 billion flotation in 2011, according to data compiled by LSEG.
Reuters exclusively reported on Saturday that Venture Global was set to formally pitch the highly anticipated IPO to investors this week.
The company is offering 50 million shares priced between $40 and $46 each.
The IPO comes amid growing global LNG demand as the world shifts towards renewable energy.
The United States, a major LNG supplier to Europe and Asia, has emerged as the world's largest exporter of the superchilled gas, thanks to its abundant natural gas reserves and the development of LNG terminals along the Gulf Coast.
North America's LNG export capacity is expected to more than double by 2028, according to the U.S. Energy Information Administration.
President-elect Donald Trump's incoming administration is widely expected to bring an end to Biden administration's year-long pause on LNG export approvals.
"Venture Global's IPO couldn't have been better timed. Investors are eagerly looking for companies that will benefit from Donald Trump's policies and Venture Global ticks the right boxes," said Dan Coatsworth, investment analyst at AJ Bell.
The company has five LNG projects in various stages of development near the Gulf of Mexico in Louisiana, and expects to have a total peak production capacity of 143.8 million tonnes per annum.
A big risk to the flotation, however, is "multi-billion-dollar arbitration claims being pursued by clients which allege it (Venture Global) reneged on contracts when LNG prices jumped as a result of Russia's invasion of Ukraine," Coatsworth said.
Venture Global has raised roughly $54 billion of capital for its projects and generated about $19.6 billion in gross proceeds from LNG sales as of Sept. 30.
METEORIC RISE
Venture Global was founded in 2013 by two industry outsiders - former investment banker Michael Sabel and financial lawyer Robert Pender.
The company has since grown into one of the biggest U.S. LNG exporters, competing with names such as Cheniere Energy (NYSE: LNG ), Freeport LNG, and Sempra.
Venture Global began generating proceeds in 2022 when its first facility, Calcasieu Pass, started producing the superchilled gas.
But the facility is still being commissioned - the testing and optimizing before commercial operation. The lengthy process has led to contract disputes from customers including BP (NYSE: BP ), Shell (LON: SHEL ) and Edison, over the non-receipt of contracted cargoes.
Venture Global argues that with the Calcasieu facility still in the commissioning phase, it relieves the company from fulfilling the long-term contracts yet.
Plaquemines, Venture Global's second facility, began producing LNG last month, becoming the first new U.S. LNG plant to start operations since 2022.
Once fully operational, Plaquemines will be among the world's biggest LNG facilities.
The plant is on track to pull 1 billion cubic feet of gas on Monday, according to data from financial firm LSEG.
Sabel and Pender will continue to control over 50% of the voting power after the offering.
Goldman Sachs, J.P. Morgan and BofA Securities are the lead underwriters for the offering.
Venture Global, which has tapped a total of 21 banks for the IPO, will be listed on the New York Stock Exchange under the symbol "VG".
The company said the IPO proceeds will be used for general corporate purposes, including the funding of its projects and continuing operations.