GE Vernova: Asia Business Grows, Analysts Warn
GE Vernova is feeling the direct impact of the digital economy’s growing energy appetite. That is why the company is currently expanding its Asian business in the fossil fuel power generation segment. The company has signed two agreements with the Thai energy provider B.Grimm Power. The first project involves the delivery of a gas turbine and the associated generator for a planned power plant in the Malaysian state of Perlis. Delivery of the technical components is scheduled for next year, while regular grid operation is set to begin in the fourth quarter of 2029. A key driver of this new construction is growing electricity demand from new regional data centres. In addition, GE Vernova signed a 14-year service contract for five existing gas turbines at two power plant sites in Thailand.
GE Vernova is also expanding its presence in Japan. For the project developer Eurus Energy, GE Vernova is supplying seven onshore wind turbines for the Hiyamizutouge wind farm. Each turbine has a capacity of 4.2 MW, for a total installed capacity of 29.4 MW. The technical specifications of the rotors are precisely tailored to local climatic conditions. The agreement also includes a maintenance contract with an initial term of 2 years.
Despite the strong order intake, some view GE Vernova’s stock critically. The research firm GLJ Research recently issued a clear “Sell” recommendation. The price target of USD 470 is well below the current market level. This is attributed to an expected decline in margins in fiscal year 2027. Since the deliveries planned for this period were largely contractually locked in as early as 2024, and thus before the recent price increases, the experts anticipate significantly lower profitability. With an EBITDA forecast of USD 7.42 billion for 2027, GLJ Research’s projection is 22% below general market expectations.
Zefiro Methane: Order Momentum Gains Steam
Zefiro Methane is also stepping up its pace in securing new orders. The specialist in the remediation of abandoned oil and gas wells has secured three additional government-funded projects in Ohio and Pennsylvania with a total value of approximately USD 1.9 million. The company will plug 12 abandoned wells. Notably, Zefiro was the sole bidder on two of the projects.
The two contracts, Trumbull 3F and Lake 18F in Ohio, alone will generate approximately USD 1.47 million in revenue. This amounts to an average of about USD 184,000 per well, which is more than 40% above the published average cost of the state’s Orphan Well Program of USD 129,997.93. The Pennsylvania project is expected to bring in at least an additional USD 435,000. Since the four wells are located just a few minutes’ drive from the headquarters of the subsidiary Plants & Goodwin, mobilization costs are likely to be comparatively low.
These contracts tap into a massive market. Zefiro identifies, surveys, and plugs abandoned and orphaned oil and gas wells and can also generate revenue through methane measurements and emissions credits. The company is now active in 13 US states.
At the same time, the order backlog is growing. Just in early September, Zefiro received another state-funded contract worth USD 11.5 million, which runs through June 2029. Of this amount, approximately USD 3 million is expected to be recognized as revenue by the end of June 2027. Together with the existing Ohio contract worth USD 19.6 million, this significantly increases revenue visibility.
Analysts also see enormous potential. GBC Research has set a price target of CAD 2.12. Analysts estimate that the Viking rigs acquired in May will generate USD 8 million in additional annual revenue starting in 2026/27. Added to this is the opportunity to resume the high-margin carbon credit business. If the company succeeds in scaling up its operations, Zefiro could enter a new phase of growth.
Sempra: Long-Term Deal and Dividend
Sempra may be sending the clearest signal yet that natural gas is by no means on its way out. Its subsidiary, Sempra Infrastructure, has agreed with the Brazilian conglomerate Petrobras on a long-term LNG supply contract. The agreement spans 20 years and guarantees the Brazilians an annual supply of about 0.8 million metric tons. Petrobras is thus the first South American company that Sempra has been able to secure as a direct LNG customer.
The natural gas destined for Petrobras is produced at the Port Arthur facility in Texas. Specifically, it comes from the second expansion phase, for which the final investment decision was made in September of last year. The two new production lines are scheduled to begin regular commercial operations in 2030 and 2031. With this expansion, the processing capacity of the Texas facility will double to up to 26 million metric tons per year. The construction project is part of the company’s overall strategy to serve the Pacific and Atlantic markets from various locations.
In addition to operational progress in the infrastructure sector, the group plans to continue sharing the company’s growth with its shareholders. Sempra, whose core business also includes the operation of extensive energy grids in Texas and California, will pay a dividend in the upcoming quarter as well. The parent company’s board of directors has approved a regular dividend of USD 0.6575 per common share.
The natural gas boom is back and is opening up multiple opportunities. GE Vernova is benefiting from the global rise in demand for new power-generation capacity, while Sempra is capitalizing on growing gas demand with LNG infrastructure worth billions and long-term supply contracts. Zefiro Methane, meanwhile, is targeting a market that is becoming increasingly important as fossil fuels make a comeback: cleaning up their legacy environmental liabilities. New multimillion-dollar contracts and additional carbon credit potential could usher in the company’s next phase of growth.
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