Venture Global (VG) Q1 2026 Earnings Transcript

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DATE

Tuesday, May 12, 2026 at 9 a.m. ET

CALL PARTICIPANTS

• Chief Executive Officer — Michael A. Sabel
• Chief Financial Officer — Jonathan W. Thayer

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TAKEAWAYS

• Revenue -- $4 billion, up $1.7 billion from $2.9 billion driven by higher sales volumes but partially offset by $1.4 billion lower net LNG sales prices at Plaquemines and Calcasieu Pass.
• Operating Income -- $1.2 billion, reflecting a year-over-year increase of $71 million due to higher sales volumes offset by lower realized LNG prices.
• Net Income -- $480 million, increasing by $92 million compared with the same period last year; higher interest expense was offset by favorable shifts in interest rate swaps and lower taxes from stock option tax benefits.
• Consolidated adjusted EBITDA -- $1.4 billion for 2026, a $26 million, or 2%, year-over-year increase; margin at 30% despite challenging market conditions.
• Cargoes Exported -- 130 LNG cargoes exported in the quarter; over 150 contracted cargoes shipped since COD at Calcasieu Pass with no missed scheduled deliveries.
• Contracted Portfolio -- Contracted position increased to 84% from 69% at year-end, with recent 5-year deals (Vitol upsized to 1.7 MTPA, Trafigura, and a new 5-year agreement for 0.85 MTPA with Total Energies finalized, and a 20-year offtake agreement with Hanwha Aerospace).
• Project Financing -- Closed $8.6 billion project financing for CP2 Phase 2; total CP2 project financing now $20.7 billion, labeled as "the largest stand alone project financing ever completed."
• Debt Activity -- Raised over $11 billion year-to-date for development and refinancing; recent $1.75 billion Term Loan B issuance at Calcasieu Pass fully redeemed Stonepeak Bayou Holdings preferred equity; $750 million Pass notes issued and used to repay Calcasieu Pass construction loan; more than $900 million debt reduction at Calcasieu Pass and Plaquemines and $500 million repaid on the CP2 bridge loan since January.
• CP2 Construction Progress -- All 21,800 feet of perimeter wall completed for watertight integrity; 12 liquefaction trains and 3 gas turbines delivered and on foundations, "First LNG is still tracking well for the second half of next year."
• Guidance -- Consolidated adjusted EBITDA guidance for the full year is $8.2 billion to $8.5 billion, assuming a liquefaction fee of $9.50 to $10.50 per MMBtu for cargoes remaining to be sold in 2026.
• CP2 Expansion -- Near-term plan updated: full CP2 expansion now scoped at 12 trains (10 MTPA); Plaquemines bolt-on expansion remains at around 6.4 MTPA, with further trains possible as market conditions support.
• Operational Leverage -- Scale and bolt-on expansions driving cost per MMBtu lower, with Plaquemines aiming for low $0.30s per MMBtu at full capacity.
• Available Capacity -- Over 33 MTPA of additional capacity available to contract over the next several years not including commissioning cargoes; strategy includes blending long- and medium-term contracts for flexibility and financing.
• Market Commentary -- Management highlighted “approximately 20% of global LNG capacity has been offline in Qatar and Abu Dhabi,” with 13 million tons, or 3%, of global production likely to remain offline for several years.

SUMMARY

Venture Global, Inc. delivered significant revenue and earnings growth fueled by expanded sales volumes, major project contracting wins, and substantial portfolio advancement. The company finalized multiple new 5-year and 20-year offtake agreements and upsized a key Vitol contract, positioning its 2026 contracted capacity at 84%. Management underscored record project financing at CP2 and ongoing operational buildout, including completion milestones and progress on bolt-on expansions. The company maintained EBITDA margin performance and delivered clear guidance for full-year EBITDA based on active contracting and pricing strategy.

• Management stated, “we are increasingly confident it will be the fastest to progress from FID to first LNG not only for Venture Global, but in the history of the LNG industry.”
• Recent strategic capital actions included fully redeeming Stonepeak Bayou Holdings preferred equity to reduce cost of capital by about $100 million per year.
• Operational data collection capability has grown to between 800,000 and 1 million points across facilities, supporting applied AI for optimization and data-driven production improvements.
• Plans for further expansion remain subject to regulatory filings and evolving market demand, enabling rapid modular growth while maintaining low operational costs per unit produced.

INDUSTRY GLOSSARY

• MTPA: Million tonnes per annum; a common capacity metric for LNG export facilities.
• COD: Commercial Operation Date; the formal date on which an energy project begins commercial operations.
• FID: Final Investment Decision; the formal decision to proceed with full construction and funding of a major project.
• TTF: Title Transfer Facility; a virtual trading point for natural gas in the Netherlands, and a key European price benchmark.
• JKM: Japan-Korea Marker; the LNG benchmark price for spot physical deliveries to Northeast Asia.
• HRSG: Heat Recovery Steam Generator; used to improve power plant efficiency by reusing waste heat.
• MMBtu: One million British thermal units; standard unit of energy for natural gas.
• OpEx: Operating Expenses; the ongoing cost system associated with running a facility or business.

Full Conference Call Transcript

Michael A. Sabel: Global to launch its first project. Operationally, we safely exported a new record of a 130 cargoes in the first quarter. Commercial momentum has continued in 2026 with 5 year offtake agreements with Trafigura and Vitol and a 20 year offtake agreement with Hanwha Aerospace finalized in the first quarter. Furthermore, today, we are pleased to announce that the 5-year agreement with Vitol has been upsized from 1.5 MTPA to approximately 1.7 MTPA and we have also finalized a new agreement with Total Energies for 0.85 MTPA for approximately 5 years. Moving to page 8.

As you can see, we expect production from our operational and commissioning facilities to be relatively stable over the course of 2026 with normal seasonality and potential variability from Plaquemines commissioning process. Our contracted position for 2026 has increased markedly to 84% of the portfolio from the 69% reported on our fourth quarter 2025 earnings call in February. In addition, April 15 marked the 1-year anniversary of COD at Calcasieu Pass, and I am pleased to say that we have now exported >150 contracted cargoes to our customers without missing a single scheduled cargo. Turning to page 9. You can see the evolution and speed at which we are executing CP2 construction.

We are now just under 10 months from FID, and the progress being made is astonishing. CP2 is our largest project to date, and we are increasingly confident it will be the fastest to progress from FID to first LNG not only for Venture Global, but in the history of the LNG industry. That speed translates into returns as we expect we should be able to earn back nearly all of our equity in the project with pre-COD cargoes with a return on invested capital of over 30%. All 21.8 thousand linear feet of the perimeter wall is now complete. Making the facility watertight which is extremely important as we accept delivery of valuable modules.

We now have 12 liquefaction trains and 3 gas turbines for the power plant delivered to the site and on foundations. And many more on their way. First LNG is still tracking well for the second half of next year. On page 10, we thought it would be helpful to present our production profile and EBITDA sensitivity for the next several years. As you can see, our production profile is growing quickly with CP2 coming online, and continues to grow as we begin adding the bolt on expansions at CP2 and Plaquemines. In the past 2 years, we grew the number of cargoes exported by 166%. By 2028, we expect exported cargoes to grow by another 130% from current levels.

While our portfolio of 52 MTPA of medium or long term contracts is more than our nameplate capacity, it is just over 60% of the 85 MTPA we expect to have online by the 2029 providing an opportunity for further intermediate and long term contracting. The cadence of new project start up, and the subsequent commissioning cargoes also means our near term available for sale capacity is elevated over the next several years as we move each project towards COD. Matching well with the near term global supply and demand market dynamic.

As you can see on page 11, while we continue to contract available cargoes on a short, medium, and long term basis, we have over 33 MTPA of available capacity to contract over the several years with the addition of our first 2 bolt ons not including commissioning cargoes. We expect to contract the majority of this capacity over the next several years on a blend of long term contracts to support new project financing, and medium term contracts to optimize returns and flexibility. On page 12, we depict the first 2 bolt-on expansions we expect to develop after CP2 Phase 2.

We are updating our near term development plan to include the full expansion of CP2, which is 12 trains, or 10 MTPA. The Plaquemines expansion bolt on plans remain unchanged at around 6.4 MTPA with optionality that additional trains as market conditions dictate. We are working with regulators to expedite the permitting of both facilities and are actively negotiating commercial agreements. Dave already begun to order long lead equipment and will look to move forward with the first CP2 and then Plaquemines expansions by early and mid next year, respectively. On page 14, we address pertinent industry trends. Since we last reported, approximately 20% of global LNG capacity has been offline in Qatar and Abu Dhabi, as you know.

Roughly 13 million tons, or 3%, of global production, is likely to remain offline for several years, and the construction schedule of the planned expansion of Qatar's Ras Laffan remains to be updated. As reflected by healthy LNG 4 curves in January and February, we believe the LNG market was already well balanced prior to the Sarah supply disruptions. So unsurprisingly, LNG prices have subsequently been higher, and the forward curve is lifted for several years into the future. Interestingly, US LNG infrastructure which only started production 10 years ago, has now grown to 19 BCF of feed gas per day. Despite this unprecedented growth, domestic natural gas prices are almost exactly where they were 10 years ago.

The US has decades of low cost natural gas reserves positioning the country and venture global to continue to provide affordable and reliable LNG to the global market. Also think the current environment highlights the value of Henry Hub Link prices versus oil link prices that are common in most other markets. Not only has Henry Hub not moved higher with rising oil prices, but US natural gas prices have fallen as production of gas associated with oil production has increased. Examining current and future LNG production in The Middle East.

While we do not know how long the Strait of Hormuz closure will last, clearly, there is an immediate impact and we believe it is likely to take some time for even the equipment that has not been damaged to return to full operational capacity. Lower production levels are only compounding the already historically low EU gas inventory levels, which were already near multiyear lows following cold winter temperatures. Depleted inventories will need to be rebuilt before next winter, likely increasing exposure to the forthcoming winter and compounding the challenge of constrained LNG production. Also, many traditionally price elastic markets like China, India, and Pakistan have already made near term demand adjustments. And residual demand is increasingly inelastic.

As a result, we believe the current backwardation in TTF and JKM forwards is unsustainable. Storage must be replenished and winter markets are likely to rally absent a near term cessation of hostilities as market fundamentals take hold. Beyond the immediate impact of the closure of the Strait of Hormuz, and the 2 damaged Qatari liquefaction trains, the 49 million ton North Field expansion, is already delayed and we expect could be delayed further by factors like supply chain disruptions and the availability of skilled labor as Qatar works to bring that facility back on schedule. Now I will turn it over to CFO, Jonathan W.

Thayer, who will review the quarterly performance, provide an overview of our project performance, and discuss our updated financial guidance.

Jonathan W. Thayer: Thank you, Mike, and good morning to those on the line. I will be referring to the Venture Global Incorporated Form 10-Q for the quarter ended March 31, 2026. The 10-Q is available on our website and some of the key results are summarized on page 16 of the presentation. During this call, I will highlight results I believe are salient to this audience. And I encourage you to review the entirety of our financial statements in detail. Beginning with revenue, our top line was $4 billion for 2026. a $1.7 billion increase from the $2.9 billion during the equivalent period in 2025.

This increase in revenue was driven by $3.1 billion from higher sales volumes (481 TBtu in the 2020 compared with 28 TBtu in the 2025, which was partially offset by $1.4 billion from lower net LNG sales prices at our Plaquemines project and at Calcasieu Pass due to the commencement of LNG sales under its post COD SPAs. Our income from operations was $1.2 billion in 2026, a $71 million increase from $1.1 billion in the 2025. The shift was primarily driven by the higher sales volumes I previously mentioned, offset by lower LNG prices net of the cost of feed gas. Our operating costs and G&A were largely unchanged year over year.

Despite increased sales volumes and more Venture Global owned ships in operation. Our development costs were lower than the same period last year, as we were able to capitalize more costs associated with CP2 and our pipeline and bolt on expansions. Our net income attributable to common stockholders which we will refer to as net income, was $480 million for 2026, a $92 million increase from the $396 million in Q1 2025. Higher interest expense was offset by favorable changes in interest rate swaps, and lower taxes, due to higher stock option tax benefits. Shifting to consolidated adjusted EBITDA, We earned $1.4 billion during 2026, a $26 million, or 2%, increase from $1.3 billion in Q1 2025.

This increase in consolidated adjusted EBITDA was driven chiefly by higher sales volumes, largely offset by lower LNG sales prices net of the cost of feed gas. Our EBITDA margin was 30% for the quarter, despite challenging market conditions and is indicative of our substantial operating efficiencies and competitive operating advantage. I would also like to call out several additional financial updates. As Mike mentioned, we closed an $8.6 billion project financing as part of the final investment decision of the second phase of CP2 which in combination with the first phase brings total project financing at CP to $20.7 billion, the largest stand alone project financing ever completed.

Subsequent to the end of the quarter, Calcasieu Pass Funding LLC raised $1.75 billion in the Term Loan B market to fully redeem the preferred equity interest of Stonepeak Bayou Holdings which should reduce our cost of capital and tax expense by approximately $100 million per year and allow capital flow more fluidly to the parent. Additionally, last month, we issued $750 million of Pass notes. Which we used to fully repay remaining balance of the Calcasieu Pass construction loan. Already in 2026, we have raised over $11 billion in support of our development and to refinance existing debt.

As you see on page 17, based on this cargo count, we are providing a consolidated adjusted EBITDA guidance range of $8.2 billion to $8.5 billion for 2026. This range assumes a liquefaction fee of $9.50 to $10.50 per MMBtu. For cargoes remaining to be sold in 2026. And is consistent with current TTF and JKM forward price expectations. On average, if fixed liquefaction fees over the remainder of 2026 increase or decrease by $1 per MMBtu we expect our consolidated adjusted EBITDA range to adjust accordingly by $300 million to $350 million reflecting our accelerated pace of contracting and our 84% contracted position.

As a reminder, our exposure stated on our 2025 year-end call was $575 million to $625 million for every dollar move in TTF prices. And our updated forecast reflects a material reduction in EBITDA since our last call. Lastly, before turning the call back to Mike to take your questions On page 18, we walk through our capital allocation priorities. With respect to our near term objectives, the numbers speak for themselves. And our model clearly generates the highest returns in the LNG industry. As such, we believe the best use of our capital is continuing to invest in future growth. Through our bolt on expansions and adjacent infrastructure.

As cash flows from CP2 begin to materialize in a meaningful way next year, we also expect to begin reducing leverage and hope to see our debt across the capital structure shift to investment grade. We have already begun making progress on debt repayment. As total debt outstanding at Calcasieu Pass and Plaquemines have been reduced by more than $900 million And since January, we have repaid over $500 million of the bridge loan at CP2. The last of our short term objectives is to continue to simplify our capital structure, which we have already made progress towards in Q2 through the redemption of our Stonepeak preferred security and the repayment of the Calcasieu Pass construction loan.

Longer term, we expect our portfolio of high return bolt on opportunities to continue to be a compelling home for future investment. Although the scale of incremental investment is likely to shrink, relative to our escalating cash flows. Thus leaving more capital available for other uses. In particular, we expect to retire and refinance higher cost capital, as bonds mature or are callable. Additionally, we anticipate growing our dividend and potentially repurchasing shares as other means of driving shareholder value and returns. I will now turn the call back over to Mike.

Michael A. Sabel: Thank you, Jonathan W. Thayer. At this point, we would like to open up the call for Q&A.

Operator: We will now begin the question and answer session. Please limit yourself to 1 question and 1 follow-up. If you would like to ask a question, please press 1 to raise your hand. To withdraw your question, press 1 again. We ask that you pick up your handset when asking to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please standby while we compile the Q&A roster. Your first question comes from the line of Manav Gupta with UBS. Manav, your line is open. Please go ahead.

Analyst (Manav Gupta): Firstly, congrats on the guidance raise. Excellent execution. I wanted to get a little more understanding on the new 2 contracts that you have signed both with Vitol and TotalEnergies. Help us understand how those things came together. And given that you are such a low cost producer, do we expect that you will continue to get more orders, given the cost advantage you have versus your global peers?

Michael A. Sabel: Good thank you, Manav. Good morning. So Starting with the second half first, we are very active on both the long, medium, and short-term contracting conversations. And we expect to progress on all 3. And have very, very good line of sight on the contracting that we want to do to support the bolt on expansion and also to continue to term out our future portfolio. We are super excited about our 5-year deals. Those are length and a term that we planned on and I have talked about, as you know, for several years.

But we as we talked about in early calls, reached the finally reached the point, the transition point between, you know, Plaquemines progressing and CP2 progressing and comfort in the production capacity of both, in particular Plaquemines first. It allows us to do the 5-year deals now. Those initially will be serviced primarily by Plaquemines. And then as CP2 comes online next year, initially with commissioning cargoes, we will shift over to start selling commissioning cargoes out of CP2 ramp up. This is particularly important because it allows us to in today's market, you know, blend out term out, those that future production.

Has a big impact on kind of blending the risk with much higher pricing than 20 year pricing. You know, we are achieving know, roughly, you know, double our long term contract prices a little bit better.

Analyst (Manav Gupta): Perfect. My quick follow-up here is you mentioned in the opening comments, global gas prices are rising US gas prices are actually under pressure, which is what we call the VG advantage. And the way we look at it, there are, like, 8 Bcf of pipes connecting the Permian to the Gulf Coast. there is a lot of gas that will move from the Permian towards the Gulf Coast, And do you think this further widens the VG advantage where you are already low cost, but you become even lower cost as this gas starts to land on the Gulf Coast. We hope so.

Michael A. Sabel: We hope so, Manav. The I think I would I would focus you particularly on the physical infrastructure and interconnects that we put in place in our interconnecting. The Permian gas has particularly high nitrogen content. Which is not good for liquefaction facilities and LNG tankers. And to accommodate for that, we designed, configured, and built, and it is now arriving at our site at CP2, very, very large scale nitrogen removal units. Among the biggest in the country. That allow us to extract the full gas stream that we can draw from the Waha. And the combination of our 90-mile CPX lateral for CP2 are interconnects with the completed pipeline Blackfin that takes us to Katy.

And then the transportation agreements that physically connect us direct with Waha. We can uniquely absorb massive amount of gas all the way from Waha to CP2 and extract the nitrogen and use it directly into our facility. So we are excited when CP2 turns on next year to begin enjoying the flows of Waha gas.

Analyst (Manav Gupta): Thank you so much, and congrats on all the positive developments.

Michael A. Sabel: Thanks, Manav.

Operator: Your next question comes from the line of John Mackay. With Goldman Sachs. John, your line is open. Please go ahead.

Analyst (John McKay): Hey, team. Good morning. Thank you for the I want to stick on the macro Mike, you made a couple of comments suggesting effectively you would expect global gas prices to be higher than they are right now in the back of this disruption. I would be curious just to hear a little bit more on your view of maybe why they are not higher. Is it that we are seeing demand destruction? Is it a view in the market that resolution is coming sooner than it will be? Maybe just walk us through a little bit of that and what you are hearing from your customers. Thanks.

Michael A. Sabel: No. I mean it is a great question and it is obviously, markets are very complex because it is a combination of all the different markets and participants in the markets that create it. And they all have different levels of storage, different requirements to feed gas into their customers, different regulatory restrictions, and how they pass along cost and price. Obviously, different politics, different exposure, to the Middle East gas. So I think 1 of the things that might surprise people in this market or maybe not is that when it is volatile like this, and particularly around uncertainty of when conflicts that impact price might suddenly end or escalate.

You see a lot of pause in purchasing decisions for you know, in the in the short and medium term. And that means you are not getting the purchasing activity that could drive prices up. And the psychology is the customer hoping that suddenly it will end and prices will drop and so they do not wanna they do not wanna precipitously, in their opinion, move to make purchases. However, a lot of the markets are pressured by very, very historically low storage levels. And so they will have to buy. To fill up those storage levels.

And so there is pent up buying that has to happen to fill those storage levels that will probably be spread out well into next year. And so there is really an uplift that is going to last for a while. I you know, and this fundamentally is not a an LNG issue. This is just a geography and you know, portfolio exposure issue. Notwithstanding that, as you could see from our deal announcements, of the 5-year deals, and the progress that we made contracting short term that lifted our portfolio sales to 84% for this year. You know, we were we were able to do a good job. Our teams did a great job.

Know, methodically marketing into this environment. there is still there is still quite a bit to go for the market to really to really normalize.

Analyst (John McKay): Thanks. I appreciate all the thoughts there. Second quick 1 for me. You guys pulled forward slightly the formal timeline for CP 2. Still screams a little conservative versus some of the progress you have talked about on kind of site work. So maybe just walk us through you know, any level of conservatism in there and maybe what milestones you are watching on your side to be able to tighten up or maybe even pull forward that timeline a little bit?

Michael A. Sabel: So things are going extremely well. Knocking wood at CP2. We still are, we are $12 billion-plus into construction activity at CP2, but we are still only 10 months from FID. And so we want to we wanna wait a little while and get a little further along before we refine what our CP2 projections are for first LNG. but it is going extremely well. We are extremely pleased with progress. The in terms of milestones that we look for, we have we have a because of the standardization of our projects, we have pretty good views of how far we are away from certain milestones, in particular, first LNG production. Based on the status of what is on foundations.

And as we described, we have 12 LNG trains currently on foundations. it is a great achievement of the team even to have foundations at this point, by the way. And we have a, you know, a few blocks of LNG trains are coming over know, every other week. So it is progressing well. The power plant, we already have some turbines on foundations. Our HRSGs are progressing very well. At our Morgan City facility. Those are coming over nicely. I think we are waiting to see some more of the large components of pretreatment and power to arrive. So that the integration teams can get in there and start doing the inner the interconnects for those.

We forgot about the tanks. The jetty is moving along super well as well. So we are we feel good. We just want a little bit more time before we refine it.

Analyst (John McKay): Understood. Thank you for that.

Michael A. Sabel: Yep.

Operator: Your next question comes from the line of Jeremy Tonet. With JPMorgan Securities. Jeremy, your line is open. Please go ahead.

Analyst (Jeremy Tonet): Hi. Good morning.

Michael A. Sabel: Good morning, Jeremy. Just wanted to circle on capital allocation if I could. Sure. You know, clearly, a lot more cash coming through the door today expected than recently.

Analyst (Jeremy Tonet): And just wondering I guess, you think about, you know, capital allocation and leverage in particular, you know, just wondering about the thoughts about maybe at some point in the future hitting investment grade across all the opcos or whatever makes sense some point down the road for a holdco? Just wanna get a sense for how leverage fits into the picture relative to other capital allocation priorities.

Michael A. Sabel: Sure. We our expectation and our plan is to be investment grade at all levels. And we think we have a nice path to get there in not too long. Our view is we will approach in a few months COD of Plaquemines' first phase. That given the scale of production there and the earnings coverage that comes from the total production. That should be you know, it is it is up to the rating agency, obviously, but Plaquemines should be investment grade when we take COD at phase 1 which is on schedule. Phase 2, is on schedule as well for spring of next year.

And so if we do not get there by this winter, we would hope and expect by spring to be investment grade at Plaquemines. And we think that the increase in earnings that we are achieving, you know, this year and next year on you know, relative to the scale of our parent debt. which is $11 billion of high yield there, should accelerate us to getting to investment grade. The earnings coverage the speed at which we are growing earning assets, on our balance sheet, we are passing $56 billion in the first quarter of assets. And when CP2 turns on online next year, We activate another 17 to 18-plus million tons of long term contracts.

So think we are on a very good path, and our objective is to be investment grade at all levels. And we currently amortize a significant amount of our debt which is just is scheduled amortization at our project level. And as we have maturities beginning in 2028 and 2029, our current thinking is it will begin to retire. Some of that debt So on the back of our balance sheet and earning assets dramatically increasing in our earnings, increasing we also expect to begin to retire the debt.

We can we can fund all the growth that we have described We can reduce debt And as Jack described, we will have capital available if we want to buy back stock as well.

Analyst (Jeremy Tonet): Got it. that is very helpful. Thank you for that.

Michael A. Sabel: And, just wanna pivot here, I guess, to customer, conversations and maybe at a different angle.

Analyst (Jeremy Tonet): Just wondering, how that has changed with the maybe the types of counterparties over time you know, when we saw the Total agreement this morning, that would not necessarily have been the first counterparty we would have thought of there. So just wondering, I guess, how you know, conversations or relationships with various, customers have evolved over time.

Michael A. Sabel: Well, we have been in the last year plus, we have signed the most long term contracts in the world, I think. And our contracting conversations continue to increase. We are unique. In the market and as a producer, to be able to offer short, middle, and long term contracts. And that improves that improves our commercial progress. Being able to offer a middle term contract and a long term contract or some 2 year strips of cargoes along with a 20 year contract. that is something that is unique to us in the market. And that is gonna be the case for the next 5 years.

I think we are probably going to be the largest available you know, chunk of liquefaction capacity. In the next few years. And as we continue to reliably execute, and reliably deliver. As we pointed out, we did not miss a single scheduled cargo since COD of Calcasieu Pass. And we are viewed as a very reliable, high quality executor of our businesses, and that has expanded the conversations we have we have and the contracts we have been signing even with very, very conservative experienced off takers, you know, like Tokyo Gas, for example in Japan.

Analyst (Jeremy Tonet): Got it. Got it. Thanks, Jeremy.

Operator: Your next question comes from the line of Jean Ann Salisbury. With Bank of America. Jean Ann, your line is open. Please go ahead.

Analyst (Jean Ann Salisbury): Hi. Good morning. I think as you correctly forecasted on your last call and talked about in earlier remarks, Waha gas price in the Permian has blown out pretty spectacularly in the last few months. Can you remind us of BG's exposure to that spread now, like this year? And whether that played any part in the increased guidance for the year?

Michael A. Sabel: It really does not show up for us until we turn on CP2. And then our transportation and pipes and nitrogen removal unit comes into play. that is really the material exposure we have.

Analyst (Jean Ann Salisbury): there is Okay. Perfect.

Michael A. Sabel: Some gas that comes over now. But the big impact is when we turn on CP2.

Analyst (Jean Ann Salisbury): Thank you. that is that is very clear. And then the CP2 bolt on expansion, it looks like is now scoped at 10 MTPA. I think it used to be 6.4 MTA. What were the drivers of the bigger size And I guess, broadly, the scoping of the bolt ons plan has moved around a little bit over the last few quarters. Can you talk about the drivers of that And once you make the regulatory filing, does that lock in the size and scope of the bolt ons? Thank you.

Michael A. Sabel: So the change that we made as the bolt-on for CP2, and if you look at that page, I cannot remember what page number it is, it has a schematic of it. We the only change we made there is we shipped from 8 trains to 12 trains. And it is inside the wall. it is slide 12. It I think it is Slide 12 in the deck.

As you can see, we increased that in a in a pretreatment plant and a little and a few extra turbines in the power plant. that is the decision to increase the size is just our demand is so strong, and our team's success in selling 3 million tons and growing of our 5-year deals really makes that growth much more comfortable for us. And we expect we expect more middle and long term deals as well. The Plaquemines bolt on and there is a schematic on the right side of that same page 12 as well for Plaquemines. For now, it is staying the same. With 8 trains. And that is a simple, fast, expansion for us.

The and we are very comfortable that we will have the contract that we to right-size the construction loans. Keep in mind that those bolt ons will turn on much faster than what we build today. Which is massively accretive for us. And also makes the financing more attractive. We are permitting We filed, as you know, for the Plaquemines expansion. We filed for multiple bolt ons at Plaquemines. And what we are showing here is the first the first phase of the bolt ons. If the market demand and contracting picks up more, then we have the ability to very comfortably just drop in a few more trains next to the 8 that you see there.

And really fully take advantage of the incremental modular approach that we have. That is gonna lower the overall construction costs and our ownership point of the of liquefaction capacity and is super accretive to margins. Our OpEx per ton will continue to go down as we add this expansion. So we get operational leverage that is material as well on top of it. So we continue to have a very attractive permitting environment. And our 2 focuses here are gonna be these 2 brownfield sites.

Analyst (Jean Ann Salisbury): Very clear. Thank you, Mike.

Michael A. Sabel: Yep.

Operator: Your next question comes from the line of Chris Robertson with Deutsche Bank. Chris, your line is open. Please go ahead.

Analyst (Chris Robertson): Good morning. Thank you.

Michael A. Sabel: Good morning.

Analyst (Chris Robertson): Thank you, operator. Mike, in the past, you guys have talked about lessons learned in terms of the construction and commissioning process and about applying those lessons to the future facilities. But just wanted to focus more on the operational side here. Because it is pretty clear that things are going extremely well from an operational perspective at Plaquemines. Can you talk about any operational lessons learned here? Anything gleaned from the data collection efforts that you will then apply at CP2 or other future facilities?

Michael A. Sabel: Jonathan W. Thayer, do you wanna talk to that 1?

Jonathan W. Thayer: Sure. So, Chris, I think what we have spoken to and assume for some time is that our unique design has a high fixed, low variable cost model. And as we have increased the capacity from our facilities, we have been the beneficiary of lowering that cost per unit or cost per MMBtu where whereby at Calcasieu Pass, we see that leverage taking production per MMBtu from, call it, $0.45 to $0.50 at full capacity that will be south of $0.40 per MMBtu. And where we particularly see the leverage is at Plaquemines where on a nameplate basis, we are at roughly $0.44 per MMBtu. And at full capacity, we are in the low $0.30 per MMBtu area.

The benefit of these bolt on expansions that we are doing as well as we increase the scale of CP2 and build out Plaquemines further is there is even further incremental leverage, not just on a per site basis just because of the volumes created, but also as you are running the same fleet, across all of our facilities, there are significant benefits in operating leverage that we get from a fleet wide approach. that is that is really in its nascency and we continue to use our continuous improvement programs to drive that even further. So we are very excited about our operational excellence.

You see it in the safety record that we have, but you are also seeing it advantage really show up in our cost of production per MMBtu.

Operator: On the on the data side of your question, we are super remain super excited about it.

Michael A. Sabel: We as you have heard us describe before, we are somewhere between 800 thousand-plus and 1 million data collection points between our 2 facilities. We use AI tools both to optimize production but we actually have we were able to acquire so much data we use we use tools to identify the most valuable data to stream. And so we can manage our data storage costs. But I think that our data acquisition is likely as valuable or more valuable than the rest of the business. Because it is what is enabled us to grow our production capacity you know, from Calcasieu Pass where we are for the moment, a little bit above nameplate capacity.

To where we are with Plaquemines and where we are excited to be for CP2.

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