Venture Global, Inc. Price & Performance (VG)

Thank you, operator. Good morning, everyone, and welcome to Venture Global's fourth quarter and full year twenty twenty four earnings call. I'm joined this morning by Mike Siegel, Venture Global's CEO Executive Co Chairman and Founder. Jack Thayer, our CFO other members of Venture Global's senior management team.

Before we begin, would like to remind all listeners that our remarks including answers to your questions, may contain forward looking statements Actual results could differ materially from what it's describing to speak. I encourage you to refer to the disclaimers in our earnings presentation which is available the Venture section of our website. Additionally, we may include references to certain non GAAP metrics. Such as consolidated adjusted EBITDA. A reconciliation of these metrics and most relevant GAAP measures can be found in the appendix of the earnings presentation posted on our website. Finally, the guidance in this presentation is effective as of today only. It is our policy to generally not update guidance until the following quarter and not to update or affirm guidance other than through broadly disseminated public disclosure. I will now turn the call over to Mike Sabin. Thank you, Michael. Good morning, everyone, and thank you for joining us today. This call is an important milestone for Venture Global. As this is our inaugural earnings report as a public company. We are excited to share our fourth quarter and full year 2024 results along with our guidance for 2025. Which we believe will be an exceptional year for the company.

I will begin the call with an overview of our fourth quarter and full year 2024 key accomplishments and results. Before shifting to our LNG projects individually. I will then make some remarks on the LNG and broadly before turning over the call to Chuck. Who will provide a more detailed review of our financial results and guidance for fiscal year twenty twenty five. Following all prepared remarks, we will open the call to Q and A. Turning to Page six of the presentation. I'm happy to report that Venture Global performed well during the fourth quarter of twenty twenty four generating $1,500,000,000 of revenue. $871,000,000 of net income attributable to common stockholders which we will refer to as net income. And $688,000,000 of consolidated adjusted EBITDA bringing our full year 2024 revenue net income and consolidated adjusted EBITDA totals to $5,000,000,000 $1,500,000,000 and $2,100,000,000 respectively. Additionally, we finished 2024 with over $43,000,000,000 of assets on our balance sheet. And realized return on equity of 41.3%. We achieved these results as we continue to commission and perform commence commissioning at our Bakken's project and progressed our subsequent LNG and ancillary projects including CB2. At 32 commissioning cargoes during the fourth quarter resulting in 140 commissioning cargoes in total for 2024, and we recently gave notice to our long term SPA customers that the Commercial Operations Day or COD for the project will occur on 04/15/2025.

At Plaquemines, we achieved the first production of LNG on 12/13/2024 and exported our first cargo on 12/26/2024 just thirteen days later. This remarkable performance showcases the hard work and dedication of our team at Plaquemines, and our innovative approach to constructing LNG facilities. I'll provide further details on placements momentarily but I'd like to highlight upfront. That every liquefaction train we have activated thus far at Plaquemines has consistently demonstrated pro rata production levels equivalent to approximately 140% of the nameplate capacity of the facility based on the aggregate outlook from RJAs. 140%. This gives us confidence that following completion Black Diamonds will be able to perform at a recently FERC authorized upgraded capacity of 27.2 FTPA. Looking ahead to 2025, we expect that our consolidated adjusted EBITDA will be between $6,800,000,000 and $7,400,000,000 This reflects a $7 per MMBT to $8 per MMBtu fixed to the profession fee range. For available commissioning cargoes. Which is consistent with recently executed transactions. We believe the next four quarters will constitute period of meaningful growth for our company and we are focused on delivering a consolidated adjusted EBITDA in this range for our shareholders. We will also evaluate opportunities to deploy our surplus capital including through potential share repurchases.

Turning to Page seven of the presentation. I would like to touch on our compelling growth in hard machine assets over the last few years and give a preview of how we aim to continue to expand in 2025. As many of you know, our look of faction trains are factory built and arrive ready for installation into our facilities by the thousands of men and women we employ across our growing list of projects here in The United States. We are proud that the contractors and subcontractors supporting our projects employ people in over 30 states across the country.

Through our commissioning programs, we currently have 18 trains producing at Coxie Pass, and another 16 trains producing during construction at Cloughmans. Additionally, we have installed 16 more trains on their foundations at Flockmans except the delivery of two more trains this week and have our final two trains currently in transit. We expect that these trains will be incrementally commissioned and will increase the production from our second facility. Through our investment in our third project, CP2, we have executed purchase orders for another 36 straighteners. Of which 12 are already being fabricated and will arrive on a rolling basis at storage sites on the Gulf Coast beginning at the end of the second quarter in twenty twenty five. In all, by the end of twenty twenty five, we expect to have 54 trains either commissioned at Cauch Pass with another 16 trains fabricated and ready for installation at CP2 subject to FERC authorization. Happing off a rapid expansion from 18 trains to 70 trains in aggregate over the course of just twenty nine months. Combined with the extraordinary production performance of our new trains at Flockman's, which I've discussed a moment ago. Believe this asset base will serve as ballast for our growth in the coming years providing cash flow to help fund our future projects and expansions for decades.

Shifting gears a bit, I would now like to focus on Caixu Pass, which is covered by Page nine of the presentation. As mentioned, during the fourth quarter of twenty twenty four, we were able to successfully export 32 commissioning cargoes including four cargoes utilized in Venture Global owned or charter ships, bringing our full year 2024 export total to 140 commission charters. We realized a weighted average fixed vessel fraction fee of $8.79 per MMBtu for cardholders in the fourth quarter and $7.28 per MMBtu across the entire year. Although Cubesheet Pass is yet to produce above its 10 MTPA nameplate capacity, on an aggregate basis for an extended period due to ongoing power plant pretreatment and other rectification work The trains at Cap Shoe Pass have performed well beyond nameplate capacity on an individual discrete basis.

While we continue to produce substantial quantities of LNG at CAPT we we are simultaneously navigating the remaining work related to commissioning, carryover, completions, rectification work, reliability testing, and other unfinished items. We have given notice to our long term SPA customers that COD will occur on 04/15/2025 and are focused on completing final performance tests before this milestone. Which we should achieve just sixty eight months after FID.

We look forward to servicing our off date contracts for the full duration of their largely twenty year tenders.

For 2025, based on liquefaction fees achieved via cargo sold on a forward basis today. We anticipate capturing a fully weighted average liquefaction fee of $3.85 per NMBT across all forward sold stock sheet pass production. I'll sum up my remarks on Capesheet Pass with a brief note on safety, which is our top priority here at Venture Global. Today, approximately 25,000,000 work hours have been completed at Cap She Pass with only 13 reportable incidents sustained. This performance has produced a total recordable incident rate TRIR of 0.1 far outperforming the national industry average of 1.9. We are very proud of our outstanding team for achieving and maintaining the safe record especially while performing significant equipment rectification work.

And construction.

Moving on to Plaquemines and flipping to Page 10 in the presentation. I will focus on the remarkable progress we are achieving at our 20 MTPA mainplate project [indiscernible] The incredible focus diligence and craftsmanship of our team allowed us to implement a complicated reverse pull down process. Which enabled the production of first LNG on 12/13/2024. By December 26, we had successfully exported our first cargo from the facility only thirty one months after our Phase one FID. We have delivered 34 liquefaction trains to the site and produced LNG from 16 trains during construction today. Maintaining an unparalleled pace of execution for a greenfield project of scale. Underpinned by our commitment to safety. So far, each of our 16 trains has regularly demonstrated pro rata production levels that equate to approximately 140% of the nameplate capacity of the facility based on aggregate outflow from our JVSS. This performance has enabled by the engineering and design improvements we implemented at Plaquemines which were informed by the significant operational data collected and lessons learned from Tapestry Pass. These exciting results through our innovative approach and the relentless execution of our team. At Plaquemines, we have permitted and incorporated, for example, 400 megawatts of temporary power at the facility which has allowed us to mitigate contractor delays especially from the far end.

This approach allows us to progress commissioning efforts and recoup project costs through the sale of commissioning cargoes while we complete the construction of our combined cycle power plants commission and test our pretreatment systems, booster compressors, and other balanced client work streams in parallel. Although we are very encouraged by our commissioning success thus far, we recognize the challenging and highly variable process laying ahead. I want to note that achieving this considerable progress and our construction speed has been an active strategy. And has come at an increased cost By investing capital and enabling increased construction staffing levels on-site, we have pulled forward the production of LNG by months. Against the original baseline. Despite substantial delays in portions of the facility's construction in particular, with the Power Island. Over the course of construction, we have invested approximately $2,800,000,000 of incremental equity to fund these expanded work fronts and mitigate delays. We believe this is a differentiated approach from the rest of the industry enabled by our modular design. Early investment module fabrication, and engaged on-site construction management. It is also emblematic of the creative problem solving and tenacity as a bedrock of our unique corporate culture which despite setbacks, positions Plaquemines to achieve Phase one COD approximately fifty four months post FID.

For 2025, we anticipate exporting two nineteen to two thirty nine cargoes from Plaquemines. And have contracted 78 of these cargoes thus far. Capturing a weighted average fixed liquefaction fee of $7.94 per MMBtu. Again, I want to highlight our leading safety performance at Falconence. Today, over 50,000,000 work hours have been completed at the project with a TRIR of only 0.2 roughly zero point one tenth of the national average TRIR of 1.9.

And I want to turn to our next project CP2 which is covered on page 11.

CP2 is a 20,000,000 tonne of gran on nameplate capacity facility consisting of 36 of our factory built with faction trains. Based on the performance of these trains at Caixi Pass, the design improvements implemented at Plaquemines and the performance of those strains to date we believe CP2 will produce at least 28 MTPA.

Further, we currently estimate approximately five fifty charters will be exported during the construction of the facility across the commissioning programs of the project's two phases due to the company's innovative phase commissioning and start up approach. We have deployed over $4,000,000,000 thus far with our key equipment suppliers and contractors for CP2, supporting thousands of jobs in dozens of states across our country and are ready to commence on-site construction as soon as we receive all necessary approvals. As widely reported, the Department of Energy's paused on issuing LNG export approvals to countries that do not have a free trade agreement in The United States. Commonly known as non FTA nations.

Has been reversed by the Trump administration.

While there can be no assurances that timing of regulatory approvals we believe we may receive our non FDA export approval from the DOE in the near term.

We are also pleased that the Federal Energy Regulatory Commission's supplemental environmental impact statement issued last month reiterated that CP2 would have no significant emissions impacts. And we are awaiting a notice to proceed from FERC. The current regulatory environment is supportive of The U. S. LNG industry. And we have been thrilled with the backing we have received from President Trump and the current administration, members of Congress, governors including Governor Landry, Louisiana state legislators from both sides of the aisle and government and industry representatives from allied nations.

Taking advantage of these permanent tailwinds, we have commenced the FID process for Phase one of the CP2 project with our well established banking syndicate. Our bold investments in the project to date will position CP2 as potentially the most advanced project in the history of the LNG industry by the time we officially break ground in Cameron Parish. We currently aim to begin receiving major power island equipment in the production trains number fifty five and fifty six in the first half of 2025 and are targeting first production of LNG in mid-twenty twenty seven. We believe CP2 has the potential to be a key source of LNG for critical United States allies such as Germany and Japan and others. And we look forward to our role in providing InterSystems clean affordable American LNG and bolstering their energy security. Continuing with this discussion of an advantageous regulatory environment, we are pleased to announce today our plans to expand the 12. We have begun the pre filing process at FERC. For a brownfield expansion Phase three expansion configuration consisting of 24 liquefaction trains and related infrastructure. Which we expect to provide 18.6 MTPA of export capacity. We believe this expansion will be highly accretive as the new [indiscernible] would leverage existing infrastructure developed during Falcon in Phase one and Phase two including but not limited to LNG tanks, marine Jetties, pipe racks and marine offloading facilities.

We are targeting FID for this expansion project in mid-twenty seven after achieving first production at CP2. And believe this flexible incremental capacity would position us to respond rapidly to market growth signals. In a capital intensive commodity industry, capital will always flow to the most competitive projects. And we believe that an expansion of Plaquemines is one of the most economically efficient opportunities available to quickly meet growing LNG demand.

Simply stated, we believe our Plaquemines expansion along with projects we pursue in the future have the potential to displace more expensive development projects with longer construction durations enabling us to offer lower long term LNG prices to the global markets while also delivering very attractive returns to our shareholders. Turning to Page 14, we have noticed a misconception among some investors and analysts that our production outside of our twenty year contracts is fully exposed to spot for merchant prices. And that our contracted revenue profile is insubstantial. Neither of which is the case. 100% of the nameplate production capacity of Capesia Pass and Plaquemines is contracted. Including CP2 39.25 of 50 MTPA of the nameplate capacity of our first three projects is contracted in average Venture of slightly under twenty years representing over $100,000,000,000 of illustrative total contracted revenue. Our commissioning carriers, we are continuously seeking to lock in advantageous fixed equipment fraction fees and anticipate contracting board sales of strips of targets on an ongoing basis. We plan on contracting our currently uncontracted capacity at CP2 as well as our expansion capacity at Plaquemines under a blend of three to twenty year contract tenors. In the coming years, long term contracts representing hundreds of MTPA of demand are set to expire offering a significant opportunity for Venture Global to secure incremental pricing certainty and build a balanced portfolio of contract terms.

Throughout the history of our company, incumbent industry participants including LNG producers and global supermajors, have questions are a disruptive approach. Despite this skepticism, we have continued to execute and prove our critics wrong.

Our core business is building and operating machines that produce a valuable commodity. And we are focused on delivering our product faster more safely and at a lower cost than the rest of the market. We believe this is a winning formula in our commodity market and look forward to proving it with our earnings and returns in the years to come. I'll now turn it over to our CFO, Jack Thaer, to walk through our fourth quarter and full year 2024 financials as well as our guidance for 2025. Thank you, Mike, and good morning to those on the line. Will be referring to the Venture Global Incorporated Form 10 ks as of and for the year ended 12/31/2024. The 10 ks 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 that leave our salient to this audience. And I encourage you to review the entirety of our financial statements in detail. Beginning with revenue, our top line revenue was $1,500,000,000 for the fourth quarter of twenty twenty four and $5,000,000,000 for the full year. A $108,000,000 and a $2,900,000,000 decrease or a 737% decline respectively from $1,600,000,000 and $7,900,000,000 during the equivalent periods in 2023.

This decrease in revenue year over year was driven by one, lower weighted average fixed liquefaction fees of $7.28 per MMBtu versus $12.23 per MMBtu and lower natural gas commodity fees of $2.061 per MMBtu versus $3.2 per MMBtu. Results in a decrease of $2,800,000,000 and two, lower LNG sales volume of five zero one TBTUs versus five ten TBtu's resulting in an additional decrease of and $39,000,000 Our net income attributable to common stockholders was $871,000,000 for the fourth quarter of twenty twenty four and $1,500,000,000 for the full year. A $921,000,000 increase and a $1,200,000,000 decrease [indiscernible] from a loss of $50,000,000 and net income of $2,700,000,000 during the fourth quarter and full year of 2023 respectively. These shifts were driven by the stabilization of international LNG prices, resulting in lower total margin for LNG sold. And higher cost to remediate and commission the Capesheet project personnel expenses reflecting higher headcounts and costs to develop the CP2 project.

These declines were partially offset by the reduction of third party ownership interest in a consolidated subsidiary in 2023 favorable changes in the fair value of our interest rate swaps and lower income tax expense [indiscernible] Shifting to consolidated adjusted EBITDA, we realized $688,000,000 during the fourth quarter of twenty twenty four and $2,100,000,000 for the full year, a $125,000,000 and $3,100,000,000 decrease for a 1559% decline respectively.

From $813,000,000 from $5,200,000,000 during the equivalent periods of 2023. This decrease in consolidated adjusted EBITDA year over year was driven chiefly by the stabilization of international LNG prices resulting in lower total margin for LNG sold and higher O and M G and A and development expenses including cost to remediate and commission capture. [indiscernible] costs associated with personnel growth to support our growing business, and design and development costs for CP2 among other development projects As Mike discussed, we exported a total of 33 commissioning cargoes in Q4 and 141 commissioning cargoes over the entire year, which declined from 4,143 respectively compared with the same periods in 2023. Of these cargoes, 128 TBtu volumes are reflected in our results for Q4 and five zero one TBtu of volumes are reflected in the full year 2024 figures. Advancing to Page 17, we are guiding to a consolidated adjusted EBITDA range of $6,800,000 to $7,400,000,000 for 2025, incorporating in a forecasted 140 to 148 cargoes from Capescheap Pass and two nineteen to two thirty nine cargoes from Pipelines. This EBITDA range was determined assuming a fixed liquid fashion fee of between $7 and $8 gram of BTU being contracted for cargoes remaining to be sold over 2025 We consistent with current TTF and JCM forward price expectations.

This consolidated adjusted EBITDA forecast also assumes over $500,000,000 of expense development spending relating primarily to CP2 and regulatory and engineering design spend on our other developmental projects as well as the conclusion of one time rectification O and M spent at Calcutta Pass to ready the plant for an April 15 COV. On average, a fixed slip of action fees over 2025 increased or decreased by $1 per MMBtu we expect our consolidated adjusted EBITDA range to adjust accordingly by between $625,000,000 and $675,000,000 will now turn the call back over to Mike. Thank you, Jack. At this point, we would like to open the call for Q and A. Thank you. Ladies and gentlemen, we will now begin the question and answer session. Your first question comes from the line of John McKay from Goldman Sachs. Please go ahead.

Hey, good morning all. Thank you for the time. I just wanted to start a lot of moving pieces, but I want to start on the 25 guide. Maybe you could just walk us through again a little bit some of the moving pieces on kind of your assumptions on the margin And then also, how much of this continued quick ramp up plaque means is is baked in there. I think it's relative to the range you guys have given for the plus or minus $1 in spread, it's ultimately narrow. Range for the year. So maybe just unpacking a few more of the moving pieces would be helpful. Thank you.

Sure. Good morning, John. Thank you. Thanks for the question.

Obviously, the largest moving piece is just the forward curve for the remaining of the year. And so since the IPO the forward curve is compressed on the if you're looking at ETF in particular, but we also sell to Asia too. But does the European markets come in approximately 20% and Henry Hub has come up a little bit.

And so we factored in a conservative view what we're anticipating for the rest of the year. Blended in with, of course, what we've already contracted I'll let Jack give you a little bit more detail on what's been on some of the issues we have Great. Thanks, Mike. So I think it it might be instructive to walk you through how we're forecasting the EBITDA for the year and maybe in the last 30 illustrative example would be helpful.

A number of investors have looked at net spreads and here we provide guidance in the form of a fixed rate profaction fee So I think it might be helpful if we kind of walk from that spread to that fixed rate of action fee. So starting with the net spread, this is an entirely marketplace based measure, so it's visible to all participants. Using the available market data. And for simplicity, I'll provide some updates example numbers that reflect the current market So to calculate in that spread, you start with TTF. In this example, I'll use a $14 per MBTU net spread, which is roughly where the market is right now. And then from this, we subtract shipping at approximately $0.7 per MBTU and then regasification costs of $0.5 per MMBtu. Those Those two values can vary. But generally, there's some correlation between them. And then we subtract 115% of Henry Hub. Which for simplicity here, I'll just assume to be $4 So when you gross that up to 115%, that's for dollars and 60¢ in this instance. So the math is $14 for TTF minus the $0.7 for shipping, minus $0.5 for Regas, minus the $4.6 for Henry Hub grossed up and that yields on that spread of $8.02 $0 per MBTU. [indiscernible] compare this measure to how we calculate the Facebook fashion piece.

So when we're contracting with off takers, we negotiate our our contracts reflect a fixed liquefaction fee plus 115% annual rate held. These contracts for cargoes are negotiated between Enviro and seller and generally capture the net spread as well as provide a margin for the buyer. For context, recently TTF has generally been trading at an approximately 1.2 for MMBtu Premium To Gulf Coast market. Forwards. So in the same example, dollars 14 per MMBtu for TTF minus the $1.2 discount for VelvCoast Marker, which not surprisingly generally reflects the shipping and regas. Minus the 115% of Henry Hub so $4.6 in the $4 Henry Hub example I provided, [indiscernible] face liquefaction fee of $8.2 per MMBtu less buyer margin which varies depending on the market. So in the guidance, we provided a range of effectively $7 to $8 of fixed inflection fee in our EBITDA forecast. And then you need to think about our contribution margin from that. So from that, the 115% of Henry Hub generally covers the LNG feedstock. Transportation of pipeline gas to the facility and our internal gas burn at our Power Islands. We received the liquefaction fee as gross margin, deduct other costs of book liquefaction including O and M, which is generally $0.5 to $0.7 per MBtu depending on [indiscernible] So the fixed liquid fashion fee in this example of $8.2 minus the $0.5 to $0.7 per MMBtu of O and M costs, yields contribution margin of between $7 and $0.5 to $7.7 and that's ultimately what is factored into our EBITDA guidance.

Hopefully that walk was helpful. John, the back half of your question about the incorporation of the rent book on documents, we are incredibly pleased as as I described in our earlier comments, with the the rapid ramp up that the team has been able to achieve us. That platform is really an unprecedented ramp up. For a retail project of this scale. And we are excited about what we think we're going to be able to achieve for the balance of this year and for both Lachman and CP2 as well. The biggest news that we're excited about related to the trains is the performance of the trains in our view has been spectacular so far. And something that hasn't been seen before relative to nameplate capacity. And since we're in the business of manufacturing, installing, sequentially our liquefaction frames, to be able to achieve the performance of the trains that we've been demonstrating now for the first 16 of the trains that [indiscernible] incredibly exciting for us. And we have [indiscernible] view this year, we're really looking at the medium in the long term. To be able to install as many of these trains as possible and produce ultimately for fifty years from from our liquefaction trains. [indiscernible] for Plaquemines trains for the balance of this year.

That incorporates our views of the of the performance of the trains. And the sequence of the trains coming on. And it's is incorporated into the cargo count that we described before.

That's really clear. Appreciate all that color. Second question, maybe just on the Plaquemines expansion between signing longer term contracts there you mentioned also potentially adding some more contracts for for CP3. Can you maybe just talk about where you're seeing your appetite [indiscernible] sorry, where you're seeing appetite in the market for signing these long term contracts right now kind of when could we expect those in general and maybe just broadly the competitive market versus other Gulf Coast facilities?

Sure. No. So of the if you include CP2 we have 50,000,000 tons of nameplate capacity. 39 in the quarter of that 50 are contracted on largely twenty year basis. And so of CP2, we're 9.25% of the 20 And we are going to contract the balance of roughly half of the nameplate capacity of CP2 on a blended basis. Let's say three to twenty years is probably going to be the range of tenors that we're going to target. For the balance of the nameplate capacity of CP2. And then for the expected capacity production above nameplate capacity. We also are going to layer on blended contract terms that will be multi multiyear tenures on those contracts. For the bolt on that we just announced, this morning that we moved into Prefer. The 24 trains that we're developing at as a Phase three at Plaquerman's. That is larger than what we were expecting to be able to layer on. But upon more extensive engineering, we were able to really leverage existing infrastructure like tanks and pipe rocks and jetties and other systems and that enabled us to lay around more potential trains there. Than we originally anticipated. But what that means then is we have more capacity there that we're able to contract on a long term basis.

And so our plan is to contract on a a ten and twenty year basis more of that full blown Phase three capacity at Plaquemines. And at levels that we view are material discounts relative to the rest of the market. Because of what we view are very sustainable cost advantages relative to the rest of the market. And so our plan there in the and we're going to going to endeavor to demonstrate here is to do more long term contracts or for this capacity. We think there's very, very good demand in the market for long term contracts.

And and at prices that are very attractive to us. And again, as I described, at points that we think are substantial discounts to where other projects are economic. And so we think that we're in a position to displace other companies' plans [indiscernible] because of our advantages. Our plan is to use these substantial expansions to do just to grab additional market share to grow earnings but also to do it with more long term contracts to continue to build a balanced portfolio. So over time, as we incrementally add our compression trains we will be blending in layers of more multiyear contracts. That we think is an attractive way to capture more of the upside earnings of these large facilities then you'd realize that you did it with all twenty year contracts. But by plugging in shorter turns into that, we'll be able to in the balance way achieve substantially more earnings as the [indiscernible] All right.

That's clear. Appreciate it, Mike. Appreciate the time. [indiscernible] Thank you. And your next question comes from the line of Jeremy Tonet from JPMorgan Securities. Please go ahead.

Hi, good morning.

Good morning, Gary. Good morning.

Hi. Just wanted to come back to the guide, if I could.

And we've seen assets running above nameplate here, pretty encouraging numbers.

And so we just want to see, I guess, for for potential could this number be higher? Could volume surprise the upside? For the year? I mean, we're looking potential for EBITDA numbers dollars 10,000,000,000 or more and just wanted to see if we get higher volumes here, could we start moving upside to the guide as you described? [indiscernible] a ramp up of the of the production capacity at Falcon Moon's as we layer on more trains. And we are we say, we're incredibly excited about the performance of the trains after after years of incorporating our data and our process engineering and data science. To see it play out with the performance of the trains has been has been quite exciting for us and the whole team. [indiscernible] We are trying to be reasonable and conservative and balanced about our EBITDA projections. And and give ourselves appropriate kind of advance data performance to achieve the EBITDA projections. The $10,000,000,000 number that you're referencing is obviously sensitive to the what the floor curve is that's realized a little bit worse this year.

And so as we continue to contract forward strips of of our production for Plaquemines this year and next year. And then the relative sensitivity of our earnings goes goes down as we do that. And it's the TTF price or the JKN price relative to the Henry Hub price. That generates that spread that Jack went around, described earlier. And all of it is going to be sensitive to the demand side as Europe. Fills up its storage because it's well in storage. And we watch what what the demand looks like. Coming out of the rest of the market. [indiscernible] I will remind, we will remind everybody though that we are manufacturing installing, turning on operating liquefaction trains. For decades. Ultimately, we think we'll be operating these machines for fifty years or more And we have we have a very bullish view that five years, ten years, fifteen years, twenty years from now, the world will be using more and more electricity. And a large portion of that will be supplied by gas. And being a low cost producer of those of factory capacity, is enormously valuable. And that's what we're zirring in.

So as we layer in these, trains and I spent some time in my comments a couple of paragraphs really trying to describe the scale of the trains that we're layering in that will compound the earnings that we're able to achieve in the in the market in the future. And to go from 18 trains to 70 trains that are either producing, sitting on pads, on ships arriving being manufactured, to go from 18 trains to 70 trains in twenty nine months and then to have those trains outperform expectations the way we're demonstrating right now.

Is something incredibly exciting for us. And we're very focused on continuing to do that safely as possible. And methodical as possible. I answered more than you asked Jeremy, but Got it. [indiscernible] [indiscernible] helpful. Thank you for that. And just wondering, with future LNG development, just wondering, you could provide some backdrop how you see the regulatory environment now? It's a bit choppy under the prior administration. Just wondering how you see things currently and did that kind of feed into your thought, I guess, with potential with Quack here in this timeframe that's very quick to get something new going here?

No. We think our view is that that the permitting environment that we're in and going into now is likely the best in decades.

It's in the the it makes us very bullish on the ability to permit our expansion plans. It puts us in a position to be responsive to market demand. [indiscernible] we think as as in our view, the low cost liquefier and the fastest to ramp up in the market. That it positions us to be able to be responsive to demand [indiscernible] as we were describing a few minutes ago, puts us in a position because of that with those two factors to offer prices to customers that are [indiscernible] on a long term and medium term contract Venture. That is going to be extremely difficult for other boards to compete with their justified FID decisions for prospective projects. So we think we're and it's just been our plan are in position to displace those growth plans for for global competitors.

That's helpful. And just to be clear, the lines of communication to Trump at this point and moving forward just wondering if you could talk a bit more, I guess, on the contrast today versus before? [indiscernible] there is obviously there is an LNG pump that's and we're rating we're waiting for our non FTA export authorization for CP2. And we can't as I said in my comments, can't predict an exact date but we feel pretty good based on what's been said publicly and privately that that people are needed non FDA permits from the Department of Energy. The FERC Chairman, new Chairman has been designated by Trump as that. Happens with a change in administration.

And we feel that the direction is to move projects forward as they satisfy the FERC requirements and then ultimately what's left is businesses follow the rules, get their permits and then they have to compete commercially to sell their product into the market.

And in the commodity market that that we're in, price and timing are going to determine market share. And so we our view is that with permits will go faster than they have in the past. The permitting process and that people will get their permits. So that's something that has really been our primary constraint from a timing standpoint because we are in a position where we're repeating from our supply chain and the factories that produces our trains really repetitively systematically successfully as we described in what's already going on in our supply chain. We've dramatically grown our team that has executed the exact same trains that we've installed now at Caution Pass and are installing at Pockerman's and and about to receive for CP2. And we'll do the same thing for our bolt on expansions at Bockerman and others in the future. So we think we're in a very, very positive environment.

Got it. Thank you for that. I'll leave it there.

Thanks, Jeremy.

And your next question comes from the line of Jane Anna Salisbury from Bank of America. Please go ahead. Morning. Hi, good morning. I just had a question about Page 10 and the weighted average fixed liquefaction fee, the $7.94 at Plaquemines that you've had already. And thank you so much for walking us through the math of how you define that. That is kind of where does that now, I suppose, for the rest of the year, but it seems a little bit lower than what I would have thought it had been year to date. Can you kind of just kind of talk about, I guess, the buyer margin and if that's a bit more material maybe than I had calculated?

Sure. I'll say a couple of comments and then I'll let Jack provide some additional detail. [indiscernible] sold contracts historically forward. For some of that five minutes contract. Which is what we strive to do is to run multi tenor strips of forward sales And so some of those barges were sold into this year historically. And they were just lower prices than what the the forward curve was during during the winter.

And so that's just blended into higher price contracts from the current corporate.

Jean Ann, this is Jack. I'd also maybe just suppose what we experienced the capture past, what we're able to capture higher market prices and higher margins because of the maturity of that facility. For 2025. That's as far there, we've achieved $8.97 per MMBtu margins. With Plattman's, with the initiation of first LNG and then the ramp up that is always most challenging period of a plant's evolution. When you're getting those trains up and running and you're going through all your teething issues and and identifying the challenges that are complicit within or a part of the whole construction and commissioning process. And so there we were I would say, contracting on a much more real time basis extensively using our own shipping fleets as well to load the LNG that was being produced that allowed us the flexibility to ramp but also go through those teething issues. And that's why you're seeing a pretty market differential almost more than $1 between the contracting us far for Blackmon's and the contracting [indiscernible] Okay, got it. So basically longer term, the sort of Kautzhi pass versus where prices are is a better indicator to use of where buyer margin would be?

I would say our range currently as providing guidance is highly reflective of where we've been tracking many of our cargoes and certainly is consistent with the the cargoes we've sold in the last number of days. Given the pace of production that we have and work our marketing team is constantly in the market, managing the production that we have and finding buyers for that. And we're very comfortable with the the range we provided as reflective of where the market is currently transacting.

Jan, we've been going through this inflection point to center growth where we're transitioning from just having one facility with 18 trains and we're turning on another facility that will take us from 18 trains to 54 trains And so as we've just turned that project on, we're now layering in more strips of four contracts. And so if we had if we had been adding less trains or growing slower, obviously, our future earnings will be lower. But the percentage of trains that we're turning on that have been contracted in multiyear four periods would be lower. And so then when we layer on CP2, we'll be layering on those 36 trains on top of 54 trains. And so the the the impact will be different. And we don't try and make guesses on what the LNG prices are going to be We just systematically our cost average layering on our contracts incrementally over time. And so we're we're layering on more tenor. As we as time passes and we grow.

That makes sense. Thank you. And then as a higher level follow-up, there's obviously a lot of concern that potential Russia, Ukraine piece could lead to Russian pipeline flows returning to Europe in the near and medium term, which could sort of materially bring down global LNG prices. How would your future development plans for CP2 and Plaquemines change if that environment came to be, if at all?

Well, we have seen watch that and think about that a lot. We think that we think that the short term impacts that MITRE will happen as more gas comes online. Will be temporary. And so it's a question that of duration. The long term contract price today delivered from The U. S. And Europe. At the power plant is a very very low kilowatt hour electricity price. That we think that there's a lot of demand for. For you know, five, six, 7¢ kilowatt hour equivalent. Electricity at the power plant. And so we think that really low price power [indiscernible] and with demand expanding to utilize it and we think that's the case and that [indiscernible] term for for sure, but also we think we're going to be short term. The prices before the Ukraine Russia war are also instructed when you add all the gas flows going That pricing was also higher than I think people remember. And very attractive prices. For us, we continue to build and get very attractive returns. [indiscernible] over the long term still give us very attractive IRRs for building our projects and the high teens or low 20s if that happened forever.

So we can build extremely competitively. We think that's way below replacement cost.

For projects and we also think that there are is tremendous global demand for electricity that can that can be produced at that at that price point over time. So we will are in a position to modulate if we have to. Our growth. The bolt ons at Plaquemines The Phase three there, we're beginning the pre FIR process now to think will go pretty quickly. But it will still take a year to eighteen months And so during that time, we'll be watching how the market how the market pricing is behaving and we'll be Great. Thank you. That's all for me.

Yes.

Thank you. And your next question comes from the line of Chris Robertson from Deutsche Bank. Please go ahead.

Good morning, everybody. Thank you for taking my questions. Hi, Mike. Hey, Good morning Chris.

This is just a broader market question. I guess, as you're going out in the market, seeking additional contracting for CP2, can you talk about what types of customers you're currently engaged with if they're in the more traditional markets like Northeast Asia and Northwest Europe, Or are you seeing increasing engagement from places like South Or Southeast Asia emerging markets And of these customers, which ones are leaning more towards shorter term duration like three to five years versus leaning more towards the twenty year tenure?

That's a great question. Our marketing is very broad. So we're speaking to all interested buyers And what's new for us though is as our balance sheet has grown, and our business has matured, we're in a position now where we don't have to primarily just offer twenty year contracts.

So we're able to offer a blend of shorter term contracts in the fourth, twelve years ten years, eight years, three years, five years. Then we can blend into our portfolios. Taking advantage of not just our means like capacity growth, but but the excess capacity growth in our commissioning cargoes. And so we see very strong demand still on the twenty year contracts because there was long term fuel prices are extremely attractive. But I would say it's pretty it's that interest in tenor is pretty broad because the demand side are filling various buckets of their fuel portfolios. And if you're in its utility and you run a blended portfolio of term half of it traditionally can be longer term, quarter, another quarter can be shorter five to ten years and then their final quarter can be less than five years. And so there's there's always contract roll off of all those terms from customers that creates demand. [indiscernible] any additional long term contracts there or renegotiate any previous contracts in order to satisfy any lender requirements to move forward with FID or is it all just regular We're going to get deficient in our non quarter million tons that we've contracted for CPQ already.

And we're in a awareness of strong position from from an update perspective. [indiscernible] remaining pieces are just finishing off the regulatory receiving The big one is receiving the non FTA from the Department of Energy FERC as Anne gave in the comments. A week or two ago reiterated as it relates to the supplemental environmental impact statement. That they ask for that we have no significant tax, which are there magic threshold words.

So they reiterate that Previously, they reiterated the overall work authorization. And so FERC is running through a training process as it relates to that supplemental EIS.

According to their schedule [indiscernible] And we're running our FID process for CP2 and it's parallel to that.

Got it. That's very helpful. I'll turn it over. Thank you very much for the time.

Thank you.

Thank you. And your next question comes from the line of Shadia Pareza from Guggenheim Partners. Please go ahead.

Hi, good morning, team.

Good morning.

Constantine Penob here for Shar.

Congrats on the inaugural call and thanks for taking the questions.

Thank you. A lot of two taking it to a little bit more to the broader kind of LNG market environment, especially as we look to Europe maintaining their gas storage quotas coming off of historically low storage levels in '25 and more broadly looking at long term LNG supply [indiscernible] have you participated in any incremental discussions on that front?

Yes, we're between [indiscernible] and CP2. We have substantial new supply that's coming into the market. That is is going to be critical to supplying Europe's needs and Asia's needs. And so we do follow closely with you. Answer questions when we're asked about, our views on it and also kind of our our views on the timing of being able to execute and provide additional capacity. In our view, the markets are much tighter from a supply demand standpoint. Globally than I know a lot of consultants guide to. And we think that the demand in the market is in the need, even beyond just the need to resupply storage, is more significant and we think it's growing. And so we're going to watch that really carefully as we go through our permitting process for additional capacities beyond CP2. To be in a position to rapidly rapidly respond to those press signals.

Okay. Thanks for that. And maybe just a quick follow-up on CP2 and the expansion projects. With where you're seeing and I think I've heard this on the last question too, where you're seeing the 26, 27 forwards and the contracted market signals are those fully supportive of going to FID on those projects just as we're thinking about the volatility does it change anything on timing, hurdle rates or the need for longer term subscription for those projects to support the project financing?

No, we're in a good spot on CP2. From a return standpoint even at much lower prices than than we have in the forward curve. [indiscernible] [indiscernible] returns that we have there are still very attractive and it's a strong competitive position.

Relative to where the bulk of the rest of the market needs to contract [indiscernible] Where you stand from the CPG standpoint, even if even if demand is flatter than we think it's going to be.

Excellent. Appreciate it. Thanks so much.

I think that's the go ahead.

Closing remarks.

Thank you very much. Thank you you everybody. We appreciate all the time.

And the questions and look forward to answering more questions in the evening days.

And we encourage you to please watch the gas flows going into our facilities, and it's a great way to track on a continuous basis. Our performance. The teams are working safely as always very hard to layer in incremental trains and production capacity We are very very happy as I've mentioned this in times about the performance of our trains and as we as we continue to build our facilities we think about the earnings that will be possible to produce from those facilities over many years to come and how as you layer on incremental trains, how that increases And we will be very prudent in in taking a view on short term changes in market prices and volatility as it relates to the timing of our growth. But we will also be looking to be opportunistic in earning or achieving market share. Because we even at low market prices still achieve very attractive returns. Obviously, prices go higher, we do better. But we still do we still do well in in these lower markets as well, lower priced markets as well. So thank you very much. We appreciate it and look forward to speaking to you in the near term and years to come. [indiscernible] Thank you.

And this concludes today's call. Thank you for participating. You may all disconnect.