Venture Global-Vitol LNG deal targets upside in 2026-27 spot prices

Venture Global's latest US LNG deal with Vitol, which Atlantic Basin traders say is priced at 119% of Henry Hub plus $2.80-$3.20/million British thermal unit, is attractive for at least the first years of the five-year term, the traders have told Platts.

The LNG deal is driven by expectations of elevated spot prices and favorable spreads versus Northeast Asia and Europe.

On March 23, Venture Global announced the binding free-on-board LNG sales agreement with energy trader Vitol for about 1.5 million metric tons/year, beginning in 2026.

"Quite a good deal for Vitol, in the money in the front," a trader said.

Taking 119% of Henry Hub plus liquefaction fees of $2.80-$3.20/MMBtu implies an FOB price of $7.387-$7.767/MMBtu using the 2027 NYMEX Henry Hub futures settlement average of $3.838/MMBtu, Platts data shows, excluding shipping and regasification.

"If the Vitol-VG deal had started in 2028, I would say it would have been very favorable for Venture Global," a second trader said. "Starting in 2026, however, I think Vitol can capture significant value from the potential spread in the early years of the agreement versus JKM."

Platts, part of S&P Global Energy, assessed the DES Northwest European LNG marker for Calendar 2027 on March 25 at $13.915/MMBtu.

At the same time, the DES Northwest Europe LNG markers for Cal 28 and Cal 29 were assessed at $9.693/MMBtu and $7.885/MMBtu, respectively, on March 25.

Over the same period, the JKM Northeast Asian LNG benchmark for LNG cargoes delivered to Northeast Asia for Cal 2027 was assessed at $15.125/MMBtu at Singapore close on March 25, while the Cal 2028 and Cal 2029 contracts were assessed at $11.125/MMBtu and $9.075/million British thermal units, respectively.

Before the US and Israel attacked Iran on Feb. 28, the LNG market was poised for a period of low spot prices, as a wave of liquefaction capacity was set to enter the market over the next few years.

Supply outlook

S&P Global CERA data shows that US LNG exports are forecast to grow by roughly 83% in 2030 to 207.22 million metric tons from 113.43 million mt exported in 2025.

This growth is expected to account for around 46% of the global LNG supply growth through the decade, but traders say Middle East disruptions have tightened balances and point to a growing supply deficit.

"Spot prices are expected to remain high now, that surplus we were all talking about is now a deficit," a third trader said. "The glut is effectively gone, I was hearing that we will be 4% short in terms of supply for 2026, let alone down the curve."

On expectation of higher spot prices over 2026-28, a fourth trader said, the back end of the deal is less favorable for Vitol.

A Vitol spokesperson declined to comment March 26.

A fifth trader said the deal does not make sense, adding that "Venture Global could sell for the next three years that volume on the spot market for $5 to $6 higher than that price."

Platts assessed JKM for May at $18.022/million British thermal units, while Platts assessed its DES Northwest Europe marker for May at $17.466/MMbtu March 25.

Liquefaction fees

Most sources agree that the price is high relative to historical Venture Global liquefaction fees, but broadly in line with where US LNG term pricing is clearing today.

"Depends on when the five-year deal starts," a sixth trader said. "If it's 2028, then low $3's. ... If it's 2029-30, then high $2's [makes sense]."

Venture Global had not responded to a request for comment from Platts.

"With the current market situation, it seems to me that Vitol negotiated this well," a seventh trader said. "VG wants continuity in its supply, so they know Vitol will ship to them no matter what and won't cancel on them."

"It's higher than what they typically sell at, but we believe the actual cost constants for US projects are closer to $3 than $2.5," another trader said.

Several other US LNG projects had marketed liquefaction fees at or below $2.50/MMBtu, while Cheniere said during its fourth-quarter 2025 earnings call in February, it was comfortable offering fees "above the midpoint of" $2.50-$3/MMBtu range because of the reliability it provides.