Venture Global, Inc. Q1 FY2025 Earnings Call

Welcome to the Venture Global Inc. First Quarter 2025 Earnings Call. I will now hand it to Michael Pasquarello, Senior Vice President, Investor Relations for a brief introduction.

Thank you, operator. Good morning, everyone, and welcome to Venture Global Inc.'s first quarter 2025 earnings call. I'm joined this morning by Mike Sabel, Venture Global's CEO, Executive Co-Chairman, and Founder; Jack Thayer, our CFO; and other members of Venture Global's senior management team. Before we begin, I would like to remind all listeners that our remarks, including answers to your questions, may contain forward-looking statements and actual results could differ materially from what is described in the statements. I encourage you to refer to the disclaimers in our earnings presentation, which is available on the Investors' section of our website. Additionally, we may include references to certain non-GAAP metrics, such as consolidated adjusted EBITDA. A reconciliation of these metrics to the 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. In general, we will not update guidance until the following quarter and we will not update or affirm guidance other than through broadly disseminated public disclosure. I will now turn the call over to Mike Sabel.

Thank you, Michael. Good morning everyone and thank you for joining us today. We are pleased to share our first quarter 2025 results and update our guidance for 2025, which we believe will be a strong year for the company. I will begin the call with an overview of our first quarter 2025 key accomplishments and results before shifting to our LNG projects individually. I will then make some remarks on the LNG industry broadly before turning over the call to Jack, who will provide a more detailed overview of our financial results and updated guidance for fiscal year 2025. Following all prepared remarks, we will open the call to Q&A. Turning to Page 6 of the presentation. I am happy to report that Venture Global performed well during the first quarter of 2025, generating $2.9 billion of revenue, $1.1 billion in income from operations and $1.3 billion of consolidated adjusted EBITDA, representing increases of 105%, 75%, and 94%, respectively, compared with the first quarter of 2024. Our projects exported a total of 234 TBtu of LNG, a new record high for the company, which is an increase of 113 TBtu or 93% from the fourth quarter of 2024. This impressive performance and increase in LNG production are attributable to the project execution discipline and operational excellence of the Venture Global team. On Page 7, we provide greater detail on our quarterly results, which we achieved as we wrapped up commissioning and rectification work on our Calcasieu Pass project, continued construction and commissioning on both phases of our Plaquemines project and progressed our subsequent projects, including CP2. At Calcasieu Pass, we exported 34 commissioning cargoes during the first quarter, and we are proud to report that Calcasieu Pass achieved its commercial operation date, or COD, on April 15th, 2025. Although this milestone occurred after the end of the first quarter, we wanted to highlight this important achievement for the company and our team who worked exceptionally hard to execute very challenging rectification work without a single recordable safety incident. Plaquemines exported 29 commissioning cargoes during the first quarter and we continue to see strong performance from this facility with all 18 liquefaction trains activated during the quarter, demonstrating production levels of approximately 140% of nameplate capacity. This gives us confidence that following completion of our construction and commissioning, Plaquemines will be able to perform at the upgraded capacity of 27.2 MTPA that FERC recently authorized. At present, Plaquemines is producing LNG from 22 liquefaction trains, and we expect to have started up all 24 of the Phase 1 liquefaction trains by the end of May. Turning to CP2. The project received a non-FTA export authorization from the U.S. Department of Energy on March 19th, locking in an essential permit ahead of our final investment decision or FID for Phase 1 of the project which is anticipated for the middle of this year. We also recently entered into a $3 billion bank loan facility from a syndicate of 20 global banks, which will help fund capital expenditures associated with the project until FID, at which time we will pivot to a traditional construction loan. In addition, CP2 upsized its 20-year SPA with New Fortress Energy from 1.0 MTPA to 1.5 MTPA, bringing CP2's 20-year SPA total to 9.75 MTPA. We believe we are making good progress on the contracting front and anticipate further updates on SPAs during the second quarter of 2025, both with other existing SPA counterparties as well as with potential new customers. Furthermore, FERC issued its final supplemental environmental impact statement for CP2 on May 9th this past Friday, recommending approval of the project. This is the second instance of FERC finding that CP2 would have no significant air quality impact and positions FERC to approve the project and issue notice to proceed with construction imminently. Our business is scaling rapidly with 18 liquefaction trains now commercially operating at Calcasieu Pass, another 36 trains delivered at Plaquemines with 22 activated thus far and another 36 trains purchased for CP2, Venture Global will be capable of providing over 67 MTPA of peak production across our first three projects once complete before considering the significant brownfield expansions we have previously announced. As we noted last quarter, changes in natural gas prices, both domestic and international, could impact our consolidated adjusted EBITDA guidance. We have seen the spread between domestic and international prices for gas and LNG compressed since our previous report, which naturally influences how we think about guidance for the remainder of the year. Looking ahead to the remainder of 2025, we are revising our guidance from our previously reported range and now expect that our consolidated adjusted EBITDA for 2025 will be between $6.4 billion and $6.8 billion. This reflects a $6 per MMBtu to $7 per MMBtu fixed liquefaction fee range for available cargoes, which is consistent with recently executed transactions and current market forward prices and provides Venture Global with additional margin that we can reinvest into our asset base. We will continue to update our guidance each quarter to reflect shifts in market forwards, especially during the commissioning phases of our projects. As Jack will cover later in the call, our 2025 guidance will become less sensitive to movements in market prices as the year progresses and we continue to contract our available cargoes. Shifting gears a bit. I would now like to focus on Calcasieu Pass, which is covered by Page 9 of the presentation. As mentioned, during the first quarter of 2025, Calcasieu Pass was able to export 34 commissioning cargoes and realized a weighted average fixed liquefaction fee of $8.80 per MMBtu. While producing these cargoes, the facility simultaneously navigated all remaining work related to commissioning, carryover completions, rectification work, reliability testing and other unfinished items and commenced commercial operations on April 15, just 68 months after FID, outpacing other projects that took FID before Calcasieu Pass. Our Q1 2025 operating and maintenance costs at Calcasieu Pass reflect the incremental expenses of completing the significant work. Importantly, having completed this work, Calcasieu Pass is performing with materially improved reliability and availability levels. Since COD, the facility has delivered cargoes on schedule to all foundational customers, and we look forward to operating the facility safely and reliably for the full duration of our customers' largely 20-year SPA tenors. For the second, third, and fourth quarters of 2025, based on liquefaction fees achieved from cargoes sold on a forward basis to date, which includes some commissioning cargoes from the beginning of April, we anticipate capturing a weighted average liquefaction fee of $2.21 per MMBtu across all forward sold Calcasieu Pass production. Including the 34 cargoes exported from the facility in this quarter, we now anticipate exporting between 145 and 150 cargoes by the end of the year, an increase of two cargoes to the top of our previously reported range and an increase of six cargoes to the lower end of our range, reflecting our confidence in the production capacity of the rectified equipment. I will sum up my remarks on Calcasieu Pass with a brief note on safety, which is our top priority. To date, our team has achieved a total recordable incident rate, TRIR, of 0.10, far outperforming the national industry average of 1.9. We are very proud of our team for maintaining the safety record, especially while pushing towards COD. Moving on to Plaquemines and flipping to Page 10 in the presentation. I'll focus on the construction and commissioning progress achieved at Phases 1 and 2 of our 20 MTPA nameplate project south of New Orleans. During the first quarter of 2025, the Venture Global team achieved an extraordinary safe start-up of the first 18 liquefaction trains at the facility. This enabled Plaquemines to export 29 commissioning cargoes, meeting the top of our previously projected range and realized a weighted average fixed liquefaction fee of $7.26 per MMBtu. All major equipment and materials, including all 36 liquefaction trains have been delivered to the site. And to date, LNG has been produced from 22 trains, while the remainder of the facility is simultaneously constructed. As detailed in our prior report, Plaquemines has engineered, permitted, procured and installed approximately 400 megawatts of temporary power at the facility. This proactive measure has allowed Plaquemines to mitigate contracted delays, especially with respect to the Power Island and continue progressing commissioning and start-up activities. Although we are very encouraged by the progress at Plaquemines thus far, we recognize the challenging and highly variable construction and commissioning process lying ahead. For 2025, including the 29 cargoes exported from Plaquemines in this quarter, we now anticipate the facility exporting between 222 and 239 cargoes by the end of the year, which represents a slight increase to the lower end of our previously reported range. Plaquemines has contracted 89 of these remaining cargoes thus far, capturing a weighted average fixed liquefaction fee of $7.46 per MMBtu. Again, I want to highlight the leading safety performance at Plaquemines. To date, our team has achieved a TRIR of only 0.21, roughly one-tenth of the national average TRIR of 1.9. Collectively, across Calcasieu Pass and Plaquemines, we contracted 45 more cargoes for export in 2025 since our prior report and have contracted 198 of a potential 326 cargoes or roughly 60% of our total Q2 through Q4 2025 production. We believe this strategy allows us to de-risk our LNG production and reduce sensitivity to movement in market prices. I now want to turn to our next project, CP2, which is covered on Page 11. CP2 is a 20 million ton per annum nameplate facility consisting of 36 of our factory-built liquefaction trains based on the performance of similar trains at Calcasieu Pass, the design improvements implemented at Plaquemines, and the performance of those trains to date. We believe CP2 will be capable of peak production of 28 MTPA once completed and commissioned. Further, we currently estimate more than 550 cargoes will be exported during the construction and commissioning of the project's two phases. CP2 received conditional approval to export LNG to non-FTA nations from the U.S. Department of Energy on March 19th, 2025, including a lengthy process with the DOE spanning multiple administrations. We appreciated the support of the Trump administration in lifting the Department of Energy's pause on issuing new LNG export approvals and swiftly resuming LNG export authorization process. On May 9th, FERC issued the final environmental impact statement for the project, reconfirming their positive analysis on the project and setting it up for final approval by the commission, which should result in the issuance of notices to proceed with on-site construction this summer. As I mentioned at the beginning of the call, we recently entered into a $3 billion bank loan facility from a syndicate of 20 banks to fund CP2 manufacturing, procurement, and engineering ahead of an FID construction financing to be closed after receiving notice to proceed from FERC. These asset level nonrecourse financings will fund CapEx associated with CP2 going forward, which represents a considerable majority of our planned capital expenditures. Our investments in the project to date have advanced CP2 considerably. We have deployed approximately $5 billion thus far with our key equipment suppliers and contractors, and we believe this preparation will enable CP2 to reach first LNG production on pace or even faster than our first two projects. Turning to Page 13 and the LNG industry broadly. I would like to address some of the recently announced tariffs and highlight several factors that mitigate risk to our business. Our exposure to tariffs can be broadly bifurcated into two categories; one, exposure related to tariffs imposed by the United States, which could potentially increase the cost of raw materials and fabricated modules we use to construct our facilities; and two, retaliatory tariffs imposed by foreign nations on LNG imports, which could put downward pressure on demand for U.S.-produced LNG. Beginning with tariffs imposed by the United States, our Calcasieu Pass and Plaquemines projects are not exposed to any material import tariffs. Calcasieu Pass has declared commercial operations and Plaquemines has taken delivery of all major equipment. With respect to CP2, our investments to date have allowed us to procure, deliver, and stockpile a significant amount of raw materials, components, and in some cases, fully fabricated modules. Caveating that the tariff landscape is evolving and there is no assurance as to the ultimate impact on our business, we believe our total exposure amounts to roughly only 1% of our total budget for the CP2 project before considering any potential exemptions for materials relating to LNG facility construction. Shifting to tariffs imposed by foreign nations. While we cannot estimate the ultimate impact of these levies given the rapidly evolving geopolitical situation, we remain in close contact with our customers and stakeholders as the tariff conversation evolves. I will now turn it over to our CFO, Jack Thayer, to walk through our first quarter 2025 financials as well as our guidance for the remainder of the year.

Thank you, Mike and good morning to those on the line. I will be referring to the Venture Global, Inc. Form 10-Q for the quarterly period ended March 31st, 2025. 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 $2.9 billion for the first quarter of 2025, a $1.5 billion increase from $1.4 billion during the equivalent period in 2024. This increase in revenue was driven by; one, $1.1 billion from higher sales volume, 228 TBtu in the first quarter of 2025 compared with 141 TBtu in the first quarter of 2024. And two, $380 million from higher prices, weighted average fixed facility fees of $8.55 per MMBtu in the first quarter of 2025 versus $7.40 per MMBtu in the first quarter of 2024, and realized gas feedstock prices of $4.23 per MMBtu in the first quarter of 2025 versus $2.59 per MMBtu in the first quarter of 2024. Our income from operations was $1.1 billion in the first quarter of 2025, a $463 million increase from $617 million in the first quarter of 2024. This shift was primarily driven by the higher sales volume and higher LNG prices I mentioned previously, which resulted in a greater total margin for LNG sold. These increases were partially offset by $146 million higher depreciation and $143 million higher operating costs in support of the ramp-up of LNG production at the Plaquemines project and operating our LNG tankers as well as remediation and rectification costs associated with the preparation of the Calcasieu project for COD. Our net income attributable to common stockholders, which we refer to as net income was $396 million for the first quarter of 2025, a $252 million decrease from $648 million in Q1 2024. This decrease in net income was largely driven by non-cash factors such as unfavorable changes in the fair value of our interest rate swaps, which constituted a quarter-over-quarter decline of $566 million. Shifting to consolidated adjusted EBITDA. We realized $1.3 billion during the first quarter of 2025, a $653 million or 94% increase from $693 million in Q1 2024. This increase in consolidated adjusted EBITDA was driven chiefly by higher sales volumes and higher LNG prices, resulting in greater total margin for LNG sold and was offset partially by $143 million from higher O&M. As Mike discussed, our projects exported a total of 63 commissioning cargoes in Q1, which increased from 40 cargoes compared with the same period in 2024. Of these cargoes, 228 TBtu of volumes are reflected in our results for Q1 2025 compared with 141 TBtu in Q1 2024. Advancing to Page 17, we are now guiding to a consolidated adjusted EBITDA range of $6.4 billion to $6.8 billion for 2025, incorporating a forecasted 145 to 150 cargoes from Calcasieu Pass and 222 to 239 cargoes from Plaquemines, inclusive of the 63 cargoes we exported in the first quarter across both facilities. This consolidated adjusted EBITDA range was determined assuming fixed liquefaction fees of between $6 and $7 per MMBtu for cargoes remaining to be sold over 2025, consistent with current TTF and JKM forward price expectations. This consolidated adjusted EBITDA forecast also assumes approximately $300 million of Q2 through Q4 expensed development spending related primarily to regulatory and engineering design spend on our development projects. On average, if fixed liquefaction fees over the remainder of 2025 increase or decrease by $1 per MMBtu, we expect our consolidated adjusted EBITDA range to adjust accordingly by $460 million to $480 million, down from the $625 million to $675 million range provided in our previous guidance. This reduced sensitivity to market prices reflects the contracting we executed during the first quarter. Our current guidance was adjusted less than our prior sensitivity range of $625 million to $675 million would have suggested due to this pace of contracting. I will now turn the call back over to Mike.

Thank you, Jack. At this point, we would like to open the call up for Q&A.

Thank you. This concludes Venture Global Inc.'s first quarter 2025 earnings presentation. We will now open the line for questions from the public. The first question comes from John McKay at Goldman Sachs. Please go ahead.

Hey everyone. Good morning. Thanks for the time. I want to pick up on some of your ability to sell more cargoes looking forward in the near-term. So, you added about 40 since the last presentation. Can you just remind us like is that the right pace going forward? What's been your ability to kind of fully capture the margin we see on our screen with those sales? And how does that change as we kind of look forward into 2026?

Yes, we are very pleased with the strong market demand for our cargoes. We are transitioning from 18 LNG trains at the end of 2024 to 54 trains by the end of this year. We don't intend to make predictions about future prices but instead, we take a strategic approach by securing sales of future cargoes. Overall, we are satisfied with our progress, and the demand we are seeing this year and into next year for these cargoes appears to be very robust.

Maybe just a little more specifically, is this effectively formulaic at this point where you're looking to have X% of four quarters forward sold out, lower percent, et cetera?

It's not quite formulaic, but we are on a fairly steady basis weekly working on transactions of sales of cargoes for the balance of this year and into next year. The customer appetite on the other side is fairly steady as customers are looking to fill out portfolios and in the case of Europe, executing their plans to put the capacity, the import capacity volumes that they want in place or to fill up storage in Europe, which still is a little below historical levels at this point. And so we feel really good about demand. And we watch the conversations and the tariff negotiations with China, which also could result in increased demand this year.

And maybe I'll just add one more question. Just on that, what are those longer-term contract conversations looking at like right now, you increased the New Fortress contract. You talked a little bit about this, but just talk to us a little bit more about your ability to sign more 20-year SPAs at this point?

We are currently engaged in numerous negotiations for long-term contracts, primarily 20-year terms. We anticipate executing and announcing several 20-year contracts in the upcoming quarters. We are very satisfied with the demand and our position in these negotiations. Therefore, the market and our investors should expect to see more announcements regarding additional 20-year agreements.

Appreciate that. Thanks for the time.

Thank you. The next question comes from Jeremy Tonet at JPMorgan. Please go ahead.

Good morning. I'd like to continue the conversation about contracting. Could you share any updated insights on the levels you aim for in CP2 as you look to expand? Specifically, what percentage of long-term contracts are you targeting? Additionally, as you pursue new contracts, could you elaborate on how you view your position against competitors in securing these contracts? Are your goals focused more on existing clients or attracting new ones? I'm interested in your perspective, especially considering the competitive landscape.

In the past few months, since we began ramping up Plaquemines, we've observed that the facility's production is significantly exceeding our upper expectations for capacity, reaching the 140% we've mentioned. As I noted earlier, we anticipate seeing similar or even better results for CP2. We have developed and are continuing to enhance production capacity beyond what we had expected just a short time ago. Consequently, our willingness to enter into long-term contracts has increased. We plan to pursue more 20-year contracts than initially anticipated, and we are excited about this opportunity. The market demand is currently very strong, better than it has been in recent years. Our competitive edge in terms of cost and pricing positions us well to secure contracts, and we expect to expand our portfolio of 20-year contracts with both existing and new customers. As I mentioned in my earlier remarks, we anticipate more announcements regarding 20-year contracts in the coming quarters.

Got it. Thank you for that. And maybe pivoting towards CP1, just as far as the operations there. Just wondering if you could talk a bit more, I guess, how you see the expected ramp there, how you think about achieving the targeted excess capacity? The numbers that you put out in the past, do you think that is something you hit by the end of this year or 2026? Or just any color in general would be very helpful.

Sure. Since we completed the rectification work earlier, at the end of the first quarter and early in the second quarter, we were able to take COD on April 15th, which we're very excited about. This is the result of many years of effort, especially since it's our first project. We're pleased with the work completed on the performance of Calcasieu Pass. We performed well during the lender reliability test, and we believe the guidance we've provided on production for the year from Calcasieu Pass is conservative and reasonable. We continue to gather a significant amount of data during production at Calcasieu Pass, which helps us identify enhancement opportunities for our production levels. Additionally, we've gained insights from the significant design improvements made between Calcasieu Pass and Plaquemines. These learnings from Plaquemines will allow us to improve production levels at Calcasieu Pass over time. We have a clear plan about what we can achieve at Calcasieu Pass for now, and we'll maintain our current guidance while allowing a quarter or two to pass. As we implement incremental improvements, we recognize there are opportunities for upside at Calcasieu Pass. However, the potential at our Plaquemines and CP2 facilities, including the significant brownfield opportunities at both sites, is much larger than at Calcasieu Pass. This means the upside potential at those facilities significantly outweighs the incremental gains at Calcasieu Pass. While we'll still pursue improvements at Calcasieu Pass, the growth potential will be more substantial at the larger facilities.

Got it. That’s helpful. Thank you.

Thanks Jeremy.

Thank you. The next question comes from Jean Ann Salisbury at Bank of America. Please go ahead.

Hi, good morning.

Good morning.

Your volume ramp for Plaquemines has been quite impressive. To delve deeper into your earlier comments, what do you see as the main limiting factor for the Plaquemines ramp moving forward? Is it the need for approvals to begin module installation, constraints from temporary power, or is it something else affecting the volume ramp?

That's a great question, and it significantly impacts our year due to the large number of trains we are adding. Currently, our ramp is constrained by the power needed as we increase the required power for the trains. FERC is effectively keeping up with our incremental commissioning activities at Plaquemines. The key issue is the power. We have planned for years to incorporate temporary power between the additional turbines we've integrated at the site and the simple cycle capacity we've added temporarily from our Phase 1 power plant. This has allowed us to achieve a notable ramp-up, which may be the fastest increase in cargo count at any facility. We will provide more details on that in the future. Ultimately, it all comes down to the power ramp. However, we plan and expect to have all 36 trains at Plaquemines generating LNG this year, bringing our total to 54 trains, which we are very proud of. Additionally, we have already acquired 36 trains at CP2. Therefore, we are currently producing, commissioning, manufacturing, and developing 90 trains as a company.

Great. That's very helpful. And then do you anticipate that getting the FERC permit at CP2 will help you get contracts? Was that important to potential customers?

I think in this permitting environment, expect people fully expect and have expected CP2 to get all its final approvals. And so I don't think that was a constraint or is a constraint on the customer side. We don't feel constrained. We're in active discussions with all the contracts that we want for CP2. And so we don't feel constrained at all on it. And we feel like they're going well. It was a major milestone, Jean, with the approval just this past Friday, the confirmation from FERC on our supplemental air environmental impact statement on schedule from FERC. And the second time they've reaffirmed that we have no significant impacts on air. And of course, we have the full FERC authorization from FERC already on the overall EIS and are waiting for just the final commission confirmation of that.

Great. Super helpful. Thank you.

All right. Thank you.

Thank you. The next question comes from Elvira Scotto at RBC Capital Markets. Please go ahead.

Good morning Elvira.

Good morning everyone. Thanks for all the tariff commentary and cost impact to CP2. Can you talk about some of the other costs? Specifically, I'm thinking labor costs, especially as we see more of these projects potentially move forward. So, any other costs or your views on if there's a potential that CP2 goes above that $27 billion to $28 million cost estimate?

We believe that from a cost standpoint, the past couple of years have been the most challenging environment for our projects since the 1970s, primarily due to significant inflation and rising interest rates. It remains a difficult situation that we navigate daily given the scale of construction at Plaquemines and CP2, along with the ongoing procurement and fabrication work at CP2. Nevertheless, we feel that we are in the best position of any project globally to handle these challenges. The unique design of our facility, with much of it manufactured in factories around the world, provides us a significant edge. We have outlined our strategy for CP2 for the third time after CP1 and Plaquemines, and we are confident about our cost projections for CP2. We are further along than we've ever been on a project, both in engineering and procurement, and we already possess most of the equipment for Phase 1 of our power plant. Our first liquefaction trains are arriving in the next few months, with about 12 scheduled for this year and already in production. We are optimistic about this progress. In terms of labor, our facility's off-site construction means we have one of the lowest labor footprints among major LNG projects. This positions us well, and our cost advantage provides us with pricing power. Any cost and schedule challenges in the broader market represent opportunities for us to outpace our competitors.

Okay, great. Thank you for that. And then just going back to the competitive environment, given the competition and the potential FIDs here, what are you seeing in terms of kind of offtake rates or fees? Are you seeing downward pressure on rates? Or is the appetite strong enough that rates are holding steady?

There are many projects out there competing for contracts. However, they are not all equal because the delivery schedules for these projects vary significantly. In the case of CP2, our ability to execute on schedule for Plaquemines gives us an advantage, especially considering how far along we are with our engineering investments at CP2. These advantages influence pricing, allowing for potentially higher prices or the opportunity to capture market share due to our delivery capabilities. Overall, the ability to raise prices in this market is somewhat limited at the moment, but our capacity to execute at very profitable prices is very appealing right now.

Great. Thank you very much.

Thank you. The next question comes from Brandon Bingham at Scotiabank. Please go ahead.

Good morning Brandon.

Hi, good morning. Thanks for taking my question here. I wanted to ask, and I know this is a smaller piece of the pie right now, but just if you could discuss some of the Lower 48 production developments that we're currently seeing and that are sort of expected to persist over the next 12 to 18 months, like what, if any, potential bottlenecks or maybe opportunities do you see with some of the projects, the pipeline projects specifically that you kind of have going and in the backlog or maybe even to a lesser extent on the sourcing of feed gas side of things?

From a middle to long-term perspective, we anticipate a more efficient permitting environment that will enhance connectivity between basins and support investments in increased production to meet growing demand. In the case of CP2, we are very pleased with the plan we established a couple of years ago and have been implementing, which involves a longer lateral known as CPX for CP2. This lateral extends westward and connects with various pipelines, including a significant line, Blackfin, that is progressing well in partnership with WhiteWater and links further west to Matterhorn, which runs all the way to the Permian. We have a substantial 20-year transportation agreement there, placing us in an excellent position for gas supply related to our upcoming project, CP2. For existing projects, additional pipelines are being developed in Haynesville and Texas, along with multiple lines traversing from west to east, which will also contribute more supply to support Plaquemines. I want to highlight that the considerable amount of gas from our pipelines and others coming from the Permian presents a challenge due to the higher nitrogen content, which complicates liquefaction and shipping. We foresaw this issue years ago and engineered, procured, and are now fabricating large nitrogen removal units, currently the largest on the Gulf Coast, which will enable us to process significant volumes of Permian gas that other facilities may struggle with. Overall, we are very confident in our gas position for all our projects, especially CP2.

Great. Great, that's great to hear. And then maybe just a quick one, like Plaquemines' first LNG timing was pretty accelerated. To what extent can we maybe extrapolate that into CP2 timing, just kind of given the manufacturing style or modular style of the business and the assets?

We think quite a bit. So, the first trains at CP2 will be trains number 55 and 56, and that applies to other systems since our facilities are largely identical. And our team, which is 1,600 and growing have now executed multiple identical systems across power and liquefaction and pretreatment and balance of plant, marine systems, et cetera. And those lessons learned have carried over into CP2, and we're really excited about it where things that have worked well or things that didn't work well are incorporated into our execution. We are also the furthest along on engineering and procurement by far of our three projects. pre-FID for Plaquemines, for both Phase 1 and Phase 2, we're a little over $1.6 billion. And for CP2, we're around $5 billion. And so that combined with how far along on engineering and how we're repeating execution of the same configuration systems, equipment, supply chain make us really excited about execution for CP2. And so we think subject to weather delays at CP2 that our target is to do better than we did at Plaquemines. And the weather delays are really accumulated lightning stand downs more than hurricanes. Over the course of construction of several years. It's afternoon lightning activity that causes you for safety reasons to stand down at construction sites, generally aggregates to more days off than hurricanes coming through. But other than that, we feel very excited about where we are planning on schedules for CP2.

Awesome, very helpful. Thank you.

Thank you.

Thank you. The next question comes from Chris Robertson at Deutsche Bank. Please go ahead.

Morning Chris.

Hey, good morning. Thank you for taking my questions. Hey Mike. Just as it relates to the conversations with potential new contract customers, are those conversations taking place with the traditional kind of Northwest European and Northeast Asian market participants? Or are you having conversations with potential customers in other regions, Southeast Asia, South Asia and other emerging markets?

We're talking with the traditional buyers that you described in addition to some that are in other regions as well. I would say the bulk of it are the known buyers in the market. And as I'm answering this question, I'm thinking about just the distribution of buyers. It's still tilted a little bit towards European buyers. But the Asian buyers, and that includes multiple countries in Asia are still very active. And I would say the level of interest, I would still describe as increasing from an already very active level.

Okay, great.

It's pretty broad. Go ahead.

No, go ahead, Mike.

We're incredibly bullish on the short, middle, and long-term demand for gas. We continue to see that in the market activity and the appetite. And so the middle, short- and long-term contracting activity is strong, and we expect to get stronger. And we think that gas is going to play an increasingly important role as the data center demand continues and the investment in data center demand continues to increase in a market that we still view as very, very tight on electricity generation capacity in both Europe and Asia. And so it's a great market to be in and Venture Global between CP2 and our brownfield expansions is probably the largest stop for available capacity in the next three, four, five years.

I just ask my follow-up question. As it relates to Plaquemines, you said you plan to exit May at 24 trains. We'll exit the year with all 36. Can you just comment around how many trains we were producing at the end of March? And how should we think about either on a quarterly cadence or monthly cadence, will it be kind of steady ramp-up from here? Or will there be certain quarters or months where there's a step change in production as a power unit is installed or optimized or something like that? I guess just commentary about the cadence of production ramp for the remaining of the year.

Great. Thank you. Jack Beer is going to pick up that question.

Sure. So, we had nine blocks or 18 trains operating at the end of Q1. We'll bring a further three on this quarter in Q2, which will complete the Phase 1 liquefaction build-out of the project. The next step is completing the Power Island for Phase 1 and getting that into the combined cycle, which allows us to shift the temporary power to focus on bringing on the remaining blocks and trains in Phase 2. And you should see that pretty steadily ramp, but it will pick up in more of Q3 when we complete the Power Island in Phase 1, and we're able to turn that temp power to bringing on the remaining blocks in Phase 2 and Q4.

Got it. Yes, that’s really helpful. I'll turn it over. Thank you.

Yes, I would like to add that by the end of this year, our production at Plaquemines will be three times what it is now. As we approach the end of this year and into next, we plan to increase from 18 trains to 54 trains operating throughout next year. This represents a significant change for us. Additionally, we will be adding 36 trains from CP2. There is a substantial amount of growth ahead that we have already invested in, which will continue to increase our production and earnings.

Thank you. The next question comes from Robert Mosca at Mizuho. Please go ahead.

Good morning Robert.

Hey morning Mike. Just wondering if you guys could provide an update to the expansion potential at CP1 and maybe even CP2. The Plaquemines expansion you signaled last quarter was a bit larger than expected. So could we see similar expansion upsizing at those projects? And how would that affect the batting order alongside CP3 and Delta, just given a more costly construction environment?

The expansion projects at Plaquemines and CP2 are shaping up to be larger than we anticipated being able to integrate with our existing facilities. The throughput capacity of the remaining plant infrastructure, including the jetties and tanks, has proven to be significantly better than our initial projections as we progressed with our engineering studies. Therefore, these brownfield opportunities are considerably larger, and we are enthusiastic about them because they can be developed more quickly and with cost advantages typical of brownfield sites. Consequently, we plan to prioritize these brownfield expansions ahead of CP3. While we will still move forward with permitting for all projects, the larger brownfield developments will take precedence in terms of timing over CP3 and Delta. Additionally, we are excited about the significant excess production capacity we anticipate achieving from these brownfield expansions, aiming for results similar to or better than what we accomplished at Plaquemines. Given the larger scale of these opportunities, we will have much more volume to secure long-term contracts at highly competitive prices. Therefore, we plan to engage in considerable long-term contracting as a result of these larger opportunities than we had projected just a few months ago.

Got it. That's helpful color. And a follow-up for me. Just revisiting the cost outlook at CP2, wondering what your timeline is looking like for entering into an EPC contract for Phase 2?

We've established that the EPC role for us is different from the rest of the industry that typically outsources custom construction for entire facilities. Since we have built many of our facilities starting with our first project, CP1, through manufacturers and fabricators, we have taken on a significant part of our facilities' management as owners. Therefore, the EPC scopes for us are smaller. Additionally, we have developed our own internal EPC team comprised of many specialized high performers for all our scopes. We manage execution ourselves, which we are currently doing at Plaquemines and will continue at CP2, making the EPC's role much smaller for our projects. We have been collaborating with Worley in engineering and procurement at CP2, and they have been a valuable partner. We anticipate adding more EPC contracts in the coming months while working closely with EPCs and large subcontractors involved in extensive work. As mentioned, we are already investing $5 billion in CP2, indicating significant activity with numerous contractors that has been ongoing for a couple of years.

Got it. Appreciate the time everyone.

Thank you. The next question comes from Michael Blum at Wells Fargo. Please go ahead.

Good morning Michael.

Thanks. Good morning everyone. So, I see the spending plans at CP2 in the slides. So thank you for that. So, my question is, does this represent all or most of the CapEx spending you're planning in 2025? And if not, how do we just think about total CapEx in 2025?

CP2 constitutes the majority of our capital expenditure. The brownfield projects we mentioned earlier are currently in the permitting phase. Therefore, most of the expenses will be associated with CP2. We will incur some additional expenses related to growth, but the primary focus will be on CP2. Jack, do you have anything else you would like to add?

Only, Mike, that as you mentioned in your remarks, we're undergoing the FID process for CP2. The critical first step of that was the $3 billion bank loan that is funding the growth as we finalize contracting and get ready to proceed to full FID and launch once we receive notice proceed from the FERC. So, we feel good about our funding levels and our access to capital. And the focus, Mike, as you mentioned, is almost exclusively CP2 and then permitting and engineering development of future expansion projects.

Yes, I would add, our CP2 expenses are project-level asset-based project financing and which we've done previously and the market is used to seeing.

Thank you. This concludes Venture Global Inc.'s first quarter 2025 earnings presentation. The presentation can be found on the company's website. Thank you for joining. Goodbye.