"No-moat Venture Global reported earnings mostly in line with our expectations, with major deviations being driven by full-year volumes slightly below our estimates and lower than expected interest payments. As of the time of this writing, the market has punished shares, with an intraday loss of 30% driven by upward revisions to project costs and 18% decline in volumes sold in the fourth quarter. While the news is not good, we believe the market is overreacting. Costs were always likely to increase as Venture is building out significant projects at the height of the cycle. As a result, we are only decreasing our fair value to $15 from $17.

In updating our model, we also increased our near-term production assumptions. Previously, we expected that its facilities would need a period of debottlenecking to achieve the excess volumes. Test runs at the Plaquemines facility indicate that the period is far shorter. Additionally, we have revised our expectations for marketed sales in 2025 and 2026 to $14 and $10/mmbtu, respectively. Europe has begun aggressively snapping up volumes to rebuild stocks, pushing prices up. Despite these revisions, we still expect that the company will struggle and need to take on further debt in 2026 to continue its build out and service debt.

As we hammered in our initiation of Venture Global, Venture's primary issue is that its reach exceeds its grasp. Building a vertically integrated LNG business is achievable, but at the scale envisioned risks insolvency without contracts secured. Existing projects have tapped relatively affordable debt because long-term purchase agreements secure the projects. As CP2 lacks offtake agreements, it's unlikely financing could be secured on similar terms. The LNG market looks increasingly well-supplied in 2026, while US natural gas prices remain elevated. In such a scenario, selling at spot pricing weakens margins as revenue and cost differences narrow."
https://www.morningstar.com/company-reports/1269222-cost-and-volume-worries-dont-impact-ventures-long-term-outlook#:~:text=No%2Dmoat%20Venture,cost%20differences%20narrow.