Earnings Call Transcript - VG Q3 2025

Operator, Operator

Good morning, and welcome to the Venture Global Inc. Third Quarter 2025 Earnings Conference Call. At this time, I would like to turn the conference call over to Ben Nolan, Senior Vice President, Investor Relations. Please go ahead.

Benjamin Nolan, Senior Vice President, Investor Relations

Thank you, Joanna. Good morning, everyone, and welcome to Venture Global Inc.'s Third 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 management team. Before I 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 these 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 only effective as of today. In general, we will not update guidance until the following quarter and will not update or affirm guidance other than through broadly disseminated public disclosure. I'll now turn the call over to Mike Sabel.

Michael Sabel, CEO

Thank you, Ben. Good morning, everyone, and thank you for joining us today. We are pleased to share our third quarter 2025 results and update our guidance for 2025, which we believe is highlighting a year of significant project progress, financial growth, and operational performance for Venture Global. I'll start with an overview of our major accomplishments and results from the third quarter 2025, then transition to our LNG projects individually. After that, I will provide some comments on the LNG industry in general before passing the call to Jack, who will offer a detailed review of our financial results and updated guidance for fiscal year 2025. After prepared remarks, we will open the call for questions. Moving to Page 5 of the presentation. I am extremely proud of what we are building at Venture Global. Since shipping our first cargo in March of 2022, Venture Global is on track to become one of the largest LNG producers globally, with an expected production capacity of around 67 MTPA either in operation or under construction currently, with more capacity expected from additional expansions. Our achievements in the third quarter were remarkable, thanks to the team’s coordinated efforts and diligence at every step. They have worked tirelessly to provide affordable energy security to partners around the world. We are leveraging the same commitment and execution to grow our business, utilize the industry's lowest cost LNG production strategy, and deliver that value to our global customers. Operating at this scale necessitates substantial stakeholder engagement, regulatory advocacy, access to capital, and, above all, employee dedication. Our company significantly influences geopolitics and is playing a key role in the U.S. pursuit of energy security and a more balanced global trade. In fact, I recently returned from Eastern Europe, where we secured a crucial agreement to support energy security in the region, which I will discuss shortly. Now on to Page 6. Recent months have demonstrated operational excellence at Calcasieu Pass, accelerated production at Plaquemines while managing elaborate construction and commissioning tasks, and allocated substantial resources at CP2 to meet our customer needs. These efforts allowed Venture Global to report $3.3 billion in revenue, $1.3 billion in operating income, $429 million in net income attributable to common shareholders, and $1.5 billion in consolidated adjusted EBITDA. These figures depict increases of 260% in revenue, 598% in operating income, and 439% in consolidated adjusted EBITDA compared to the third quarter of 2024. It was a remarkable quarter for our company and team. Given our success year-to-date and our outlook for the fourth quarter, along with the inclusion of certain noncash accounting adjustments for possible arbitration awards, we are slightly reducing and refining our EBITDA guidance for the year. This update reflects our clearer visibility into the expected commissioning cargos from Plaquemines and the current fixed liquefaction fees we are securing for those cargos for the rest of the year. Currently, we are observing pricing for winter cargos that suggest static TTF prices and elevated Henry Hub forwards, resulting in tighter winter liquefaction spreads. As mentioned last quarter, a $1 per MMBtu price change equates to a $230 million to $240 million shift in our anticipated consolidated adjusted EBITDA. Since we have contracted additional projected output since the last quarter, this market sensitivity has lessened. However, the compression of margins on future unsold cargos during the fourth quarter, coupled with the timing of two DES loadings, which will be loaded and delivered after the quarter, leads us to slightly adjust our 2025 guidance range to $6.35 billion to $6.5 billion of consolidated adjusted EBITDA for 2025. This range anticipates a forecast of $4.50 per MMBtu to $5.50 per MMBtu fixed liquefaction fee for available cargos remaining this quarter, aligning with current TTF and JKM forward price expectations. Our projected results also consider reserve adjustments in light of the financial consequences from the Calcasieu Pass arbitration process. We expect to provide full-year 2026 guidance in the next quarter. Please look at Page 7. The list of achievements in recent months illustrates Venture Global’s steadfast dedication to efficient project execution as we grow. We reached several major milestones, including 100 cargos exported in a single quarter, and just a few days ago, we shipped our 500th cargo from Calcasieu Pass. These accomplishments are impressive, particularly considering our relatively short operational history. While these milestones are notable, safety remains our top priority. I’m grateful to report that, despite our rapid construction and project development, our total reportable incident rate is still tenfold better than the industry average. In addition to operational victories, we have made strides in securing the capital for our growth. Specifically, the Blackfin joint venture raised $1.575 billion in financing, allowing for nearly $900 million in capital return to Venture Global. Last Friday, we finalized a new $2 billion revolving credit facility with several banks, which we expect will enhance our corporate liquidity and capital flexibility. These financing efforts build upon the $15.1 billion FID project financing for CP2 Phase 1 and the $4 billion of Plaquemines senior secured notes closed early in the quarter. Year-to-date, we have raised approximately $30 billion and completed eight separate transactions exceeding a billion dollars to further advance our business and optimize our capital structure. I’m also thrilled to share the signing of two new 20-year sales and purchase agreements (SPAs). Last Friday, we signed a 1 MTPA agreement with Naturgy of Spain for Phase 2 of CP2. Venture Global is proud to strengthen our long-term partnership with Spain through this new agreement with Naturgy, a prominent global LNG company. This contract will positively influence the U.S. balance of trade with Spain. Our unmatched speed and execution have established Venture Global as a trusted supplier in the global market. This agreement, along with the strong commercial momentum we have achieved over the past six months, signifies continued confidence from customers in our company and the robust global demand for LNG. Venture Global is committed to meeting this demand with fast, flexible, affordable, and reliable long-term supply. Additionally, last Thursday, we signed another 20-year SPA for a minimum of 0.5 MTPA with Atlantic-SEE LNG, a newly formed joint venture between Greek companies AKTOR and DEPA, marking Greece’s first long-term LNG supply agreement with a U.S. exporter. Together with our capacity at the Alexandroupolis LNG regasification receiving terminal, this agreement should significantly bolster energy security in Central and Eastern Europe, providing affordable and reliable U.S. natural gas to the region. Including the three offtake commitments we announced and signed in July, Venture Global has now secured 5.25 MTPA of new 20-year SPAs in the second half of 2025, which may be the largest in the global market, and I expect more to follow. We are gearing up towards the FID for CP2 Phase 2. Turning to Page 9, let’s discuss our projects, starting with CP2. Our team fully mobilized and began site preparations for CP2 on June 3 after receiving final approval and notice to proceed from FERC, with FID for Phase 1 announced on July 28. Additionally, on October 22, we received the final non-FDA export authorization from the U.S. Department of Energy. Phase 1 engineering is now 99% complete, allowing for procurement of over 98% of all permanent plant equipment for Phase 1. FERC has reviewed and approved 97% of all underground and foundation scopes, which enables continuous execution for Phase 1. The speed and efficiency of the team’s mobilization on-site has been remarkable, with over 3,500 personnel and more than 1,700 major construction equipment on-site. Construction is on schedule, with 98% of all civil site preparation and soil improvement tasks completed across 700 acres. This includes moving 2 million cubic yards of soil and cement, stabilizing over 6 million cubic yards of soil while utilizing over 580,000 tons of cement. Piling work has begun, with over 10,000 piles installed thus far, representing one-third of the total 32,000 piles required. To establish roads and access for foundation work, over 1.2 million tons of aggregate base has been installed. Foundation work is now ongoing in all major process areas of the facility. Notable accomplishments include pouring the first foundations for the LNG tank, the liquefaction module, and the power island switchgear building. Marine terminal work is progressing, with nearly 2 million cubic yards dredged, and almost 5,000 feet of the 22,000-foot perimeter wall is now completed. Offsite, all Phase 1 equipment module erection is underway, both domestically and abroad. I’d like to commend Baker Hughes for completing the first eight liquefaction trains, which are currently stored at their fabrication facility in Italy. The team has implemented learnings from Calcasieu Pass and Plaquemines, which are aiding construction progress. Some modifications include utilizing ten marine offloading facilities near the CP2 site—compared to just three during Calcasieu Pass construction—resulting in greater deployment speed and reduced road traffic; further modularization of new project scopes, especially for the power island; and internalizing additional construction scope with targeted subcontractor use to enhance quality, efficiency, and construction pace. Regarding Phase 2, as I mentioned earlier, we signed two new SPAs in recent days and are having constructive discussions with potential offtakers, expecting to finalize more SPAs before the end of the year. As I indicated earlier, due to the lower cost per ton of brownfield expansion and our substantial equity already invested in Phase 2—over $1 billion—we do not anticipate needing many additional 20-year SPAs to progress toward FID for either Phase 2 or subsequent Phase 3 expansions. This contract strategy supports VG in maintaining a balanced portfolio of intermediate, short-, and long-term contracts. We are targeting FID for Phase 2 in the first half of 2026. On Pages 10 and 11, we outline the value proposition of CP2 and our future projects. Page 10 lists attributes that we believe underpin our growth outlook, such as engineering and construction optimization, access to historical construction and operation data, and a team of experienced personnel focused on construction efficiency and production excellence. This results in faster financial returns and allows us to pass on capital efficiency to our customers through competitive pricing. To summarize, this supports our corporate mission of innovating to provide low-cost LNG globally. On Page 11, we illustrate how our speed and efficiency correlate to strong annual returns while offering lower costs to our SPA customers in various LNG pricing environments. Success in any commodity business hinges on being the low-cost producer; for CP2 Phases 1 and 2, this should be slightly above $1,000 per ton all-inclusive, covering our inside-the-fence power plants, pipelines, owners' costs, and all related construction expenses. Furthermore, we generate considerable cash flow during construction and commissioning, serving as an offset to project cost. Given the forward Henry Hub and TTF expectations, for CP2, we estimate those cash inflows during construction could yield around $8 billion, effectively reducing CP2's net project cost to approximately $21 billion. After the commercial operation date, cash flows will stem from fixed liquefaction fees in our long-term SPAs and contracted pricing for any available capacity beyond what we have sold under our 20-year contracts. In the case of CP2 Phases 1 and 2, we expect a medium to long-term surplus production of between 9 million and 11 million tons, with plans to sell this volume on a medium and short-term basis. On the slide, we present two fixed liquefaction fee scenarios—at $4 and $6 per MMBtu for non-20-year SPA cargos. If we assume a $4 fixed liquefaction fee, the combination of long-term contributions and available capacity would yield an estimated $4 billion for annual consolidated adjusted EBITDA. If prices increase to $6 per MMBtu for the available cargos, we predict an annual consolidated adjusted EBITDA rise to $5.2 billion. Collectively, under these scenarios and relative to our $21 billion net project cost, after accounting for 50% leverage or extra equity, these results suggest project-level returns on equity exceeding 30%, while still providing our customers with the most competitive SPAs in the market, as evidenced by the high volume of 20-year contracts we are securing. Moving to Page 12. Construction and commissioning at Plaquemines are progressing on schedule for Phases 1 and 2 while still relying on temporary power, as we are not yet in our combined 5 on 2 configuration for the Phase 1 power plant. Construction continues on our power island units, and our team has successfully started up 34 of the 36 liquefaction trains. Despite this, our ongoing construction and commissioning efforts allowed Plaquemines to export 64 commissioning cargos in Q3, achieving the higher end of our projected range. This represents a 25% increase in exported cargos compared to the prior quarter, reflecting the impressive pace we are maintaining in integrating and commissioning the liquefaction trains. The facility achieved a weighted average fixed liquefaction fee of $6.79 per MMBtu on those commissioning cargos during the quarter. As communicated to our Phase 1 offtakers, we expect to stay on schedule for COD in Q4 2026. Significant work remains, but we are making substantial strides at Plaquemines. The required combined cycle power generation equipment for Phase 1 is set to start commissioning in its 5 on 2 configuration in Q1 2026. This power island schedule, along with other ongoing tasks, grants us ample time to complete commissioning, reach substantial completion under our EPC contract, conduct lender reliability testing, and declare COD as planned. Importantly, over the past few years, we've made strategic project investments in areas like temporary power and other scopes, including the power island, to counteract EPC delays, amounting to approximately $3.3 billion of additional equity capital to maintain our COD schedule. This is not new information; it has been previously reported. These costs are beyond our FID budgets and have been absorbed as project sponsors to deliver low-cost LNG to our customers significantly faster than our competitors. I am pleased to confirm that thanks to this investment, we remain on track for COD in Q4 2026 for Phase 1 and mid-2027 for Phase 2, which reflects an impressive 54-month construction timeline, one of the best in the industry. With 144 cargos exported from Plaquemines in the initial three quarters of the year, we now anticipate the facility to export between 234 and 238 cargos by year-end. This positions us at the high end of our prior estimates, representing a 7-cargo increase on the low end and a 2-cargo decrease on the high end of our previously reported range. For Q4, Plaquemines has contracted 79 cargos, or 84% of the potential cargos for the quarter, securing a weighted average fixed liquefaction fee of $6.41 per MMBtu on those contracts. On Page 13, we present the monthly ramp-up of Plaquemines cargos exported since the beginning of 2025. Plaquemines has contributed 82% of the new LNG production capacity added to the global supply this year, boosting worldwide LNG production by more than 4%. This growth has been crucial in mitigating the effects of a greater than 33% increase in European LNG demand over the first ten months of the year as the continent transitions away from Russian gas. I commend the hard work, creativity, and determination of our VG construction team, which facilitated the increased production at Plaquemines despite the power and construction challenges. Next, I'd like to shift focus to Calcasieu Pass, discussed on Page 14 of the presentation. In the third quarter of 2025, Calcasieu Pass exported 36 cargos, aligning with our expectations but slightly lower than the previous quarter. This reduction was due to extended routine power island maintenance at the facility. This situation underscores one of the competitive advantages of our mid-scale modular approach. Specifically, due to the performance capacity of our plants and equipment redundancy, we can perform significant maintenance with only minor impacts on production. As a result, we achieve smoother production profiles and reduced operating costs per MMBtu produced. At Calcasieu Pass, we recorded a weighted average fixed liquefaction fee of $1.76 per MMBtu in the third quarter, which is lower than the $1.97 per MMBtu indicated in our October 6 8-K, as we've accounted for a noncash $27 million arbitration-related reserve over the 5.5 months of production since COD in our Q3 figures. For the fourth quarter of 2025, based on achieved liquefaction fees from both SPA and excess cargos sold forward to date, we project capturing a weighted average liquefaction fee of $2.14 per MMBtu across all forward-sold Calcasieu Pass production, which includes contracted sales under our long-term SPAs, alongside any excess cargos sold. This figure also incorporates a Q4 adjustment for arbitration reserves. Together with the 108 cargos exported from Calcasieu Pass in the first half, we now anticipate a total of 148 cargos by year-end. Cumulatively, across Calcasieu Pass and Plaquemines, we have contracted an additional 59 cargos for export in Q4 2025 since our last report, reaching contracts on 119 of the total potential 134 cargos, approximately 89% of our Q4 2025 production. I want to take a moment to update you on Calcasieu Pass's arbitration proceedings. Due to confidentiality agreements, we cannot disclose all details that we wish to share, but we aim to address some common questions. On Page 15, you will find the most frequent inquiries. First, there have been full or partial resolutions in three of the proceedings. The Shell arbitration was decided in our favor, while we settled the second with an amount not materially affecting Venture Global's results. Additionally, the arbitration panel made a partial final decision against Calcasieu Pass in the BP arbitration. Currently, four separate outstanding proceedings remain, which we expect to resolve over the coming years unless settled. Second, no damages have been determined or awarded in the BP arbitration, and a hearing date for damages has yet to be established. Financially, including BP, our customers’ claims against Venture Global for Calcasieu Pass have significantly reduced from $6.7 billion to $7.4 billion down to $4.8 billion to $5.5 billion. Our aggregate liability cap under the post-COD SPAs for the remaining four arbitration proceedings, excluding BP, stands at $765 million. Importantly, despite disagreeing with the BP award, this result does not alter our growth strategy or commitment to providing low-cost LNG to customers worldwide. Jack will discuss the accounting treatment for estimating the financial impact related to BP and these remaining arbitrations shortly. As we move to Page 17, while there has been slight softening of winter 2026 LNG spreads, demand remains robust, and margins are strong. Even as new LNG supplies enter the market in the upcoming years, we foresee prices remaining supportive in response to growing energy demand at affordable costs. The forward curve indicates that market expectations for LNG prices in Asia and Europe should remain significantly above Henry Hub for the coming 12 months. Looking beyond this timeframe, we anticipate upward demand revisions reinforcing our belief that margins will reflect insufficient LNG supply through 2028 and beyond. On Page 18, although industry analysts have forecasted a plateau in LNG demand for years, these predictions have not come to fruition as demand has continued to rise dramatically. Historically, LNG consumption has grown by about 5% to 6% annually. Even estimating a conservative 3% growth rate, the current list of new projects isn’t enough to meet global demand by the next decade. Under a 5% compound growth rate, which reflects historical trends, global LNG infrastructure would need to nearly triple to satisfy demand. While short-term fluctuations in LNG prices may occur, we remain confident in strong demand growth due to rising global electricity consumption. Recently, global AI and data center power requirements have gained significant attention, but other factors—like a growing middle class that uses air conditioning, increased industrialization, the shift away from coal, and moderated growth expectations for renewables—are likely to drive substantial LNG demand growth for decades to come. This demand growth further underscores our mission to deliver more affordable LNG to support this global trend. Now, I will hand it off to our CFO, Jack Thayer, to walk us through the financials and our updated guidance.

Jack Thayer, CFO

Thank you, Mike, and good morning to those of you on the line. I will be referring to the Venture Global, Inc. Form 10-Q for the quarterly period ended September 30, 2025. The 10-Q is available on our website, and some of the key results are summarized on Page 20 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 $3.3 billion for the third quarter of 2025, a $2.4 billion increase from $0.9 billion during the equivalent period in 2024. This increase in revenue was driven by $2.9 billion from higher sales volumes, 373 TBtu in third quarter of 2025 compared with 100 TBtu in the third quarter of 2024, primarily at the Plaquemines project, which was partially offset by $517 million from lower net rates at Calcasieu Pass due to the commencement of LNG sales under its post-COD SPAs with weighted average fixed facility fees of $1.76 per MMBtu in the third quarter of 2025 versus $6.67 per MMBtu in the third quarter of 2024, and offset by a weighted average commodity fees of $3.53 per MMBtu in the third quarter of 2025 versus $2.51 per MMBtu in the third quarter of 2024. Our income from operations was $1.3 billion in the third quarter of 2025, a $1.1 billion increase from $189 million in the third quarter of 2024. This shift was primarily driven by the higher sales volumes I mentioned previously, which resulted in a greater total margin for LNG sold. These increases were partially offset by $102 million of higher operating costs in support of the ramp-up of LNG production at the Plaquemines project and operating our LNG tankers, as well as $28 million and $129 million of higher G&A and depreciation expenses, respectively. We also experienced a reduction in our development expenses of $103 million quarter-over-quarter as many of the costs associated with our 3-phase CP2 projects were capitalized. Our net income attributable to common stockholders, which we will refer to as net income, was $429 million for the third quarter of 2025, a $776 million increase from the loss of $347 million in Q3 2024. Changes in interest rate swaps negatively impacted Q3 results both this year and in 2024 by $144 million and $480 million, respectively. And Q3 2025 net income was also unfavorably impacted by a $100 million accounting charge related to the partial voluntary prepayment of the Plaquemines term loan. Shifting to consolidated adjusted EBITDA. We earned $1.5 billion during the third quarter of 2025, a $1.2 billion or 439% increase from $283 million in Q3 2024. This increase in consolidated adjusted EBITDA was driven chiefly by higher sales volumes. As Mike mentioned earlier, our projects exported a total of 100 cargos in Q3, which increased from 31 cargos compared with the same period in 2024. Of these cargos, 372 TBtu of volumes are reflected in our results for Q3 2025, more than tripling production compared to the 110 TBtu in Q3 2024. I also wanted to further provide information regarding the accounting treatment for the BP and our 4 remaining outstanding arbitrations impact. As mentioned, our consolidated financial statements incorporate a $27 million noncash reserve relative to the period from our April 15 COD until the end of Q3. Going forward, the noncash reserve, which reflects our best estimate of award outcomes from BP and the 4 remaining arbitrations, is currently estimated to be between $14 million and $15 million per quarter through the 20-year duration of the SPA contract terms. This amount will directly reduce Calcasieu Pass revenue and flow through EBITDA, although there will be no offsets to net income due to adjustments for noncontrolling interest and taxes. Importantly, this is an estimate, and there is no cash impact to our third quarter financial statements. We will update these estimates in our financials quarterly as we finalize arbitration results and incorporate any financial awards or settlements going forward. Finally, I would like to call out several additional financial updates. Following the $1.575 billion financing of the Blackfin Pipeline and an $889 million return of cash to Venture Global, our cash and restricted cash position at the end of the quarter was over $3.5 billion. Also, subsequent to the end of the quarter, we secured a new $2 billion corporate revolver facility. We believe that with this combination of cash on hand, revolver capacity, substantial future cash flow and substantial future cash flow we expect to generate in coming quarters and billions of dollars of unencumbered assets, Venture Global is in an excellent liquidity position. Advancing to Page 21 and 22. We are updating our guidance to a consolidated adjusted EBITDA range of $6.35 billion to $6.50 billion for 2025 as we reduced and tightened the range from our previous guidance range of $6.4 billion to $6.8 billion. We have improved the lower end of our cargo production forecast range by 7 cargos, as we're now incorporating a forecasted 148 cargos for Calcasieu Pass and 234 to 238 cargos from Plaquemines. The bottom and top end of the EBITDA range was adjusted to account for arbitration reserves, 3 cargos removed from the high end of the range, the anticipation that 2 DES cargos exported in 2025 will deliver in 2026 and a lower fixed liquefaction fee of $4.50 to $5.50 per MMBtu for cargos remaining to be sold over 2025, consistent with current TTF and JKM forward price expectations. On average, if fixed liquefaction fees over the remainder of 2025 increased or decreased by $1 per MMBtu, we expect our consolidated adjusted EBITDA range to adjust accordingly by $50 million to $60 million, reduced from the $230 million to $240 million range provided in our previous guidance. This reduced sensitivity to market prices reflects the contracting we executed during the third quarter and thus far in the fourth quarter. I will now turn the call back over to Mike.

Michael Sabel, CEO

Thank you, Jack. At this point, we'd like to open up our call for Q&A.

Operator, Operator

The first question comes from John Mackay at Goldman Sachs.

John Mackay, Analyst

I do want to start on the arbitration. I appreciate the color from both of you, Mike and Jack, on the kind of funding levers here. But maybe could you walk us through in just a little more detail about how you think about funding a kind of worst-case scenario on these? And then on a related note, you lined up the $14 million to $15 million a quarter for 20 years, that gets to a number that's below the kind of total you guys talked about. So maybe just walk us through some of the math on getting to that one as well?

Michael Sabel, CEO

Sure. I'll address the first part, and Jack will likely cover the second part. We currently have a very robust cash position. The ongoing arbitrations, if we choose to settle them or if they take their full course, will extend over the next one to two years or even longer. Therefore, they are distributed over a significant timeframe. We remain optimistic about the outcomes. To address your question directly, if things do not go in our favor, any potential damages would be incurred over several years. In addition to our current cash and the earnings we anticipate over the next couple of years, we have a substantial amount of unencumbered assets. We have adequate liquidity and time to effectively manage any future potential liabilities. With this quarter, our assets exceed $50 billion. We fully own Venture Global, CP2, and our ships outright, and we hold approximately 77% of CP1. This leaves us in a very strong ownership position of highly valuable liquid assets. Jack, would you like to add to this?

Jack Thayer, CFO

Sure. So John, I think the important descriptor of how we're addressing for accounting purposes, the arbitration, is the term best estimate of award outcomes. And so as we worked with our accounting firm to analyze the remaining arbitrations, the outcome and the BP arbitration and align on what was our best estimate of the potential exposure associated with those, that's what allowed us to arrive at an estimate of the $14 million to $15 million per quarter impact. As you noted, that is an amount below the maximum liability that we've articulated. But even that's come down rather dramatically given the Shell and the other settlement awards or outcomes. So we believe this captures the accounting guidance on how to address these potential outcomes, but by no means is it a cash charge at this point. We need to fully arbitrate out the BP process, and we need to let the other core processes go forward and result in outcomes or in any potential settlements that we might achieve similar to the one that we achieved with one counterparty already.

John Mackay, Analyst

I appreciate the color. Maybe just turning to the contracts you signed recently. Can you maybe just give us an update? We've seen a lot of contracting activity across the U.S. projects so far this year. Do you think that activity continues? And where have kind of rates come in, pricing on those come in relative to your expectations? And maybe the last piece of that, has the BP ruling at all kind of changed the tone of those contracting discussions?

Michael Sabel, CEO

No, not at all. The best measure of the market's trust in us to execute today and over the coming decades is the pace at which we're signing 20-year contracts. Since the beginning of July, we've signed over 5 million tons per annum, which is the most for any project globally. This reflects the market's confidence in our execution. Earlier this year, we mentioned that we had reentered the market after observing market pricing from the sidelines. We came back after the Liberation Day tariff announcement and U.S. activities, and we have been very successful in securing the 20-year contracts we aimed for. The market remains very active for us, with a strong queue of live deals, and we expect this trend to continue. Pricing aligns well with our initial expectations, which we consider to be the most attractive long-term price globally. Additionally, we maintain some of the best returns in our market on these agreements. This enables us to offer competitive prices that the market is responding positively to, driving excellent returns for shareholders while helping to keep prices low to support growth worldwide.

Operator, Operator

The next question comes from Jeremy Tonet at JPMorgan.

Vrathan Reddy, Analyst

It's actually Vrathan Reddy on for Jeremy. I just want to follow up a little bit on the arbitration. And if you guys could talk a little bit about the confidence in that $765 million cap and maybe where that differed with the BP case versus the outstanding ones?

Michael Sabel, CEO

The $765 million cap represents the total of the remaining caps for the four outstanding arbitrations. We agree with the outcome of the Shell arbitration panel, which adhered closely to the contract results and resulted in no awards. Therefore, we anticipate a similar outcome for the remaining arbitrations. We were surprised and strongly disagree with the result from the BP panel. However, if we were to lose all of the remaining cases up to the cap, it would total $765 million. Regardless, as we have discussed, we can manage either outcome, and it does not affect our growth or our ability to finance the construction of our facilities at the pace we've outlined, which is aimed at generating future earnings from a significantly larger number of installed trains with very conservative pricing assumptions in a few years. When modeling, you will see that we recently surpassed double-digit billion dollar EBITDA figures. Therefore, we expect a significant ramp-up in earnings growth over the next few years, driven by the completion of our current construction projects and brownfield opportunities, providing us ample capital and cash flow to navigate through this.

Vrathan Reddy, Analyst

Got it. That's very helpful. And then I think the prepared remarks hit on not needing many more 20-year SPAs to reach FID on CP2 Phase 2 and the bolt-on as well. So just curious if you could talk about your strategy with regards to the tenor and contracts moving forward from here?

Michael Sabel, CEO

It's similar to what we've been discussing over the past year, which involves contracting 20-year SPAs that are sufficient to provide us with the investment-grade coverage ratios on the debt of the projects. The additional volume beyond that, which is significant, acts as extra capacity above the long-term contracts needed to fully service and amortize the debt while covering operational expenses and returns. This extra margin, along with production, provides us with an attractive upside potential on returns that we've just outlined. We anticipate and plan to contract non-20-year deals over time, both on an intermediate and short-term basis, to create a blended portfolio. As we recently reported, we have 45 MTPA of long-term contracts. When you consider what we're currently building at CP2 along with the second phase, where we've already invested over $1 billion, that totals to 67 MTPA. Out of that 67, 45 are contracted on a long-term basis, and we will secure more 20-year contracts. Thus, you can see that through the second phase of CP2, the majority will be long-term contracted, as we are already well on our way.

Operator, Operator

The next question comes from Manav Gupta at UBS.

Manav Gupta, Analyst

Congrats on a good result and the new SPA. I also wanted to talk to you about the situation in Ukraine. There was the news on Reuters. I'm not sure it was true, but apparently, you met President Zelensky with President Trump. And I'm trying to understand what can Venture Global do to help the situation in Ukraine, which is massively short gas at this point of time?

Michael Sabel, CEO

As we mentioned earlier, Plaquemines has contributed over 82% in new volume for the year. Both Plaquemines and Venture Global have significantly influenced global LNG prices, especially in Europe, which we're very proud of and is something we think about daily, particularly in relation to Ukraine and Eastern Europe. This is the most crucial aspect. Additionally, we've previously discussed that we invested several billion dollars into Plaquemines to maintain the schedule; without this, we would likely be a couple of years behind where we are now. These investments, largely influenced by Bob and me through our ownership, have been vital to keep European pricing moderate compared to recent years. Our ability to increase production capacity at Plaquemines—and soon at CP2—provides us with added LNG volumes in the coming months and years, a rarity in the overall market. We likely have the most available capacity globally to facilitate flows into the market, either directly into storage or through intermediaries, and we're actively working on this. You may have noted the agreement with Greece, which received strong support from the U.S. government, allowing us to introduce additional supply through the Southern part of that Vertical Corridor pipeline supporting Eastern European countries.

Manav Gupta, Analyst

One thing which Venture Global sometimes, I believe, doesn't get enough credit for is the massive data science operations that you have set up. When you were at the Plaquemines trip, you explained some of those. Help us understand what differentiates your data science teams and the investment that your company has made in these data science operations?

Michael Sabel, CEO

No, we're very proud of it. Sometimes we don't get credit for it because we're not sharing all our proprietary methods. However, I can tell you that we’ve always seen our facilities as complex systems that create opportunities for data acquisition and analysis. At Calcasieu Pass, we're streaming about 222,000 data points every 10 seconds, which is a significant amount of data. Plaquemines will surpass that data volume. We have a dedicated team of data scientists, process engineers, and AI programmers who are integrating this data into our operations and design changes, as we've encountered some unexpected interactions within the facilities that have helped us achieve outstanding performance results at Plaquemines. We expect these insights will also benefit CP2. This has been an incredible effort, and we've been greatly rewarded with the production volumes we've achieved and maintained. We believe this will enable us to increase CP2's capacity to 30 MTPA. We will need to seek export authorization to raise the limit from 28 to 30, but we anticipate that CP2 will outperform Plaquemines, which is performing better than any other project has ever done.

Operator, Operator

The next question comes from Jean Ann Salisbury at Bank of America.

Jean Ann Salisbury, Analyst

I wanted to talk about the CP1 volumes. As you mentioned in your prepared remarks, they have bounced around a bit the last couple of quarters, it sounds like due to the power maintenance. Can you discuss the power maintenance, I guess, and then the path to get to the sustained 12.4 MTA? And as my follow-up, are these power maintenance issues kind of unique to CP1? Or would you expect to see that maintenance eventually affecting Plaquemines as well?

Michael Sabel, CEO

The maintenance at CP1 took longer than expected. However, I don't believe this will impact Plaquemines. There will always be routine maintenance at our facilities, including the power plants. This issue resulted in one cargo. This year, we have been conservative in our guidance for Calcasieu Pass as we finalize steps to achieve higher volumes. We have a clear plan for increasing those volumes and are evaluating when to implement that plan based on the returns from investing capital into CP2, for instance, to boost output there. We consider everything as a whole, and we will reach that target. Eventually, we will also see expansions at CP1.

Operator, Operator

The next question comes from Chris Robertson at Deutsche Bank.

Christopher Robertson, Analyst

I just wanted to follow up on the previous questions. When you guys talk about getting to that 24% above nameplate over the next few years, do you think that takes place kind of steadily over time? Or do you see that taking place with step changes in any particular year? And what the implications might be for any O&M expenses related to that process?

Michael Sabel, CEO

It will be a mix of gradual increases and significant changes. We're not providing more details to protect our intellectual property. Due to our operations at the Plaquemines facility, we are performing at a much higher level of 140%. We have a clear understanding of what drives increased production, and we have a solid plan to achieve these goals. We will inform the market about the timeline when we are ready to disclose it. I have shared our confidence in reaching 30 at CP2. As I mentioned to Jean Ann, we are evaluating investments across all our facilities to enhance volume. From an operational expense perspective, adding extra trains does not significantly affect operating costs. Therefore, we see this as mainly an opportunity for increasing margins.

Christopher Robertson, Analyst

Okay. Just related to your point just now around thinking about it holistically across the varied facilities here. When you guys think about contracting, traditionally in the past, things have been tied to a specific phase or a specific project. But are you now considering structuring agreements where it's a flexible cargo across any of the facilities that are producing? Not necessarily just tied to 1, but just tied to the greater portfolio?

Michael Sabel, CEO

Yes, we are moving towards exceeding 100 million tons of annual production with the additions from CP2 and Plaquemines in the coming years. This will position us with one of the largest annual LNG production portfolios globally, providing us with significant flexibility. The extra margin of production from Plaquemines and CP2, which will also be reflected in the additional projects, contributes to this. We have a substantial portfolio of what I refer to as "extra LNG production," ensuring we have long-term contracts in place to cover our construction debt and returns. This enables us to offer more flexible portfolio sale structures with fixed delivery dates, allowing us to allocate production to specific phases in a way that will be challenging for many competitors to replicate. Coupled with our cost and price advantages, this flexibility allows us to provide highly attractive commodity prices for contracts much earlier than most others in the market. This is evident as Venture Global has garnered considerable trust and confidence from customers, resulting in long-term commitments from counterparties in recent months.

Operator, Operator

The last question comes from Bob Brackett at Bernstein Research.

Bob Brackett, Analyst

Let's discuss the arbitration situation. If we look back at Calcasieu Pass, the first cargo was in March 2022, and nine months later, arbitration was announced in December 2022. Now, with Plaquemines, the first cargo is scheduled for late December 2024. You've been ramping up throughout this year. What is your current relationship like with the existing counterparties? Are they all aligned with the pre-COD and post-COD framework that your company operates within?

Michael Sabel, CEO

We have a great relationship with the customers, we believe. And as it relates to Calcasieu Pass, we performed successfully, all of those loading since we took COD for Calcasieu Pass. We are still and have just reconfirmed it, and we just provided those comments again, we reconfirmed all the customers at Plaquemines that were still on the original schedule for the first window period for Plaquemines, which is month 54. And for a giant project like Plaquemines, 54 months is a remarkable achievement. We are still operating under around 400 megawatts of temporary power today, and that's going to continue like I described probably until the first quarter. And then we don't have substantial completion under the EPC contract until late in the summer. And including a lender liability test, reliability test, we have a lot to get done, but feel really good about achieving the original schedule with our customers for Plaquemines. That, in combination with the many billions of dollars that we've already put in extra into the Plaquemines project in order to maintain the current record setting schedule, we think we're in a very solid position for Plaquemines.

Operator, Operator

Thank you. At this time, I will turn the call back over to Mike Sabel for closing comments.

Michael Sabel, CEO

Great. Thank you, everybody. We appreciate everybody's time this morning. Thank you for all the questions. And in coming days, we look forward to answering more questions for people and look forward to being together here in a few months to report on how we ended up for the fourth quarter, and look forward to 2026. Thanks, everybody. Bye.

Operator, Operator

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating, and we ask that you please disconnect your lines.