VG - NYSE

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 laying 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. Subject to obtaining FERC approval, we anticipate mobilization to site and beginning site works and dredging by the middle of this year. 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 in 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. [Operator Instructions] 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-ish 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. No, we're really pleased with the market demand and appetite for our cargoes. We're -- as you know, we're going from 18 trains at the end of 2024 producing LNG and by the end of this year, it will be 54 trains. And so we don't look to make bets or predictions on what future prices are, and we layer in strips of sales of future cargoes. And so we're pleased with it. And the market demand this year and next year as we are marketing those cargoes looks very, very strong.

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're very active in a significant number of negotiations for long-term contracts at this point, mostly all 20-year terms. And so we expect to be executing and reporting on multiple 20-year contracts in the incoming quarters. And we're really pleased with the demand and where we stand in those negotiations. So, we -- the market, the investors in our company should expect to see announcements for more 20-year deals.

Appreciate that. Thanks for the time.

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

Good morning Jeremy.

Good morning. Hi. Just want to pick up with the contracting conversation, if I could. I wondered if you could provide any updated thoughts on how you think about levels you look for CP2 as you look to expand here, what levels of percent contracted long-term you'd like? And then at the same time, I guess, as you're looking to sign these new contracts, just wondering if you could expand a bit more how you see -- how you stand versus competitors here in winning new contracts? And are your targets more existing customers or new customers? Just wondering how you think about that given how competitive things are out there?

So, in the last -- well, really in the last three, four months since we started ramping up Plaquemines and have seen how the facility is producing really significantly above what our upper range of expectations were on production capacity, the 140% that we've been talking about. And as we said in my opening remarks, we expect to see that or even a little bit better for CP2. So, we're -- have built and are building more production capacity than we expected and planned for even just a few months ago. And so our appetite to signing more long-term contracts is greater than it was until recently. So, we are intending to do more 20-year contracts than we had been planning and which we're excited about. Appetite is very strong in the market right now. I would say it's better than it has been for the last several years. And we're -- our ability to win contracts with our cost and price advantage in the market is very strong. And so we are expecting to increase our 20-year contract portfolio with existing, but also with new customers as well. And like I said in my previous comments with John, I think people should stand by for more announcements of 20-year contracts in 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 finished the rectification work earlier, really at the end of the first quarter and early in the second quarter that allowed us to take COD in April 15th, which we're super excited about. It's a culmination of many years of work, particularly as it's our first project. We're very pleased since that work has been completed on the performance of Calcasieu Pass. And we performed really well through the lender reliability test. And so we feel that the guidance that we've given on the production for the year from Calcasieu Pass is conservative and reasonable. And we continue to consume a mass and create a massive amount of data during the production at Calcasieu Pass that allows us to look for opportunities for enhancements to our production levels. We also -- since we made some significant design improvements between Calcasieu Pass and Plaquemines have learned a lot at Plaquemines already that we'll be able to go back over time and apply to Calcasieu Pass to increase our production levels. And we have a pretty -- we have -- because of that, we have a pretty clear idea and plan about what -- about what we're going to be able to achieve at Calcasieu Pass. For the moment, we're going to maintain the guidance where we stand, and we'll let a quarter or two pass. And as we layer in some incremental improvements there, we know there are opportunities on the upside at Calcasieu Pass. Our Plaquemines and CP2 facilities, including the significant brownfield opportunities at both those facilities are so much larger just on an absolute basis than Calcasieu Pass that the upside opportunities at those facilities really kind of from a math standpoint, overwhelm the incremental upside at Calcasieu Pass. We'll still do it, but the upside in the math is just going to be bigger at the bigger 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.

As just noted, your volume ramp for Plaquemines has been really impressive. So, just to kind of drill down a bit on the comments that you just had, but what is -- going forward, what is the sort of limiter or limiting factor that drives your Plaquemine ramp? Is it getting approvals to start the modules or the constraints driven by the temporary power or something else that drives the volume ramp there?

That's a great question, and it has a big impact on our year just because of the significant number of trains that we're adding. The ramp is -- at this point is really constrained by the ramp of power as we increase the power required for the trains. And FERC is doing a good job keeping pace with our incremental commissioning activity at Plaquemines. And so really, it's the power. We plan for years to layer in the temporary power between the additional turbines that we integrated into the site and how we added some simple cycle capacity that's temporary out of our Phase 1 power plant that's allowed us to achieve this significant ramp, which I think I don't have the math in front of us, but it might be the fastest ramp-up to our cargo count that's been done at any facility. We'll have more on that in the future. But it really is about the power ramp. But we plan to and expect to have all 36 trains at Plaquemines producing LNG this year, which will take our total to 54 trains, which we're really proud of the team on. And as you know, we purchased 36 trains at CP2 already. So, we're producing, commissioning, manufacturing, developing 90 trains right now 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.

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?

So, we think from a cost perspective, the last couple of years, and we think it will continue to be the case in the near term is probably the toughest environment to build our projects in since the 1970s, just given the intense inflation that's occurred and the higher interest rates on top of it that's happened in the last few years. So, it's an incredibly challenging environment. And so it's something that we work and live every day because of the scale of construction that we're doing every month at Plaquemines and CP2 through all the procurement and fabrication activity that we're already doing at CP2. Having said that, we think we're in the strongest position of any project in the world to manage it. Our unique configuration where so much of our facility is manufactured and fabricated in factories and fabrication facilities around the world gives us a huge advantage on that. We have scripted that out for the third time with our team for CP2 after CP1 and Plaquemines. So, we think we're in a very strong position from what we've projected on cost for CP2. We are very far along, in fact, the farthest we've ever been on a project on both engineering and procurement and have received, for example, most of our power plant for Phase 1 is already in our possession. Our first liquefaction trains arrive in just the next few months. I think we're planning on 12 roughly for this year, 12 trains for this year that are already in manufacture. And so we feel really strong about that. On the labor side, again, because so much of our facility is built off-site, we have the lowest labor footprint. of, I think, any LNG project of our scale and on a relative or pro forma basis on size of facility. But -- so we think we're in a very strong position. And because of our cost -- our net cost advantage as a project, it gives us pricing power. So, any challenges on cost and schedule that exists in the macro environment for us are really opportunities for us to gain more advantage over 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?

It's -- there are a lot of projects out there that are competing and offering contracts. We -- they're not all equal, though, because the -- the delivery schedules for projects are very different. And in the case of CP2, given how we are able to execute on schedule for Plaquemines creates an advantage for us including how far along we are in our investments in engineering at CP2 as well. And so those advantages show up in price as well, either in potentially higher prices that can be achieved or in the ability to capture market share because of the attractiveness of -- and when we can deliver those. I would say overall that the -- the ability to raise prices in this market is a little bit limited for the moment. And -- but the ability to execute at prices that are very profitable for us is super attractive 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?

So, from a middle and longer-term perspective, we expect there to be a faster permitting environment that's going to be very positive in just providing more connectivity between the basins and support investments in more production to support rising demand. For us, in the case of CP2, we are super happy with the plan really that we laid out a couple of years ago, and we've been executing on, which is a longer lateral, which is called CPX for CP2, which goes to the west and interconnects with lots of pipes, including a large pipe Blackfin that is moving along well with our partners at WhiteWater that connects further to the west with Matterhorn, which is a pipe that goes all the way to the Permian, where we have a 20-year -- a very large 20-year transportation agreement with. And so we feel in great position on gas supply for our next project, CP2. For existing projects, there's additional pipes that are going in, in Haynesville, additional in Texas and multiple pipes also cutting across going from West to East that give us bringing over more supply that will support Plaquemines as well. I will add just going back to the huge amount of gas that with our pipes and other pipes will be coming across from the Permian that that nitrogen content, which is higher in Permian creates a challenge for liquefaction and in shipping. And we anticipated this several years ago and engineered and procured and are now fabricating huge NRU systems, which I think right now are the largest on the Gulf Coast that will enable us to process large volumes of Permian gas, which other facilities are going to be more challenged with. And so we look in the -- we feel -- like I said, we feel really good about our gas position for all our projects, but CP2, our next one as well.

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.

It's just -- 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 add to that, that when you look at first quarter to fourth quarter for Plaquemines, we're going to be triple the production at the end of this year that we are today. And so when you think about going into the end of the year and next year, we're going to be moving from 18 trains at the end of this year to 54 trains producing all of next year. And so it's an enormous step change for us. And then, of course, as we're adding the 36 trains from CP2. So, it's -- there's a tremendous amount of built-in growth that's coming that we've already made our investments in that are still ramping up production and earnings on.

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 CP 2. 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 brownfield expansion at Plaquemines and at CP2 are larger than we have been able -- we have expected to be able to layer on top of our facilities. The throughput capacity of the balance of plant, the jetties, the tanks as we advanced our engineering studies proved to be much more positive than we initially thought. So, those brownfield opportunities are much larger and which we're very excited about because we can build those faster and with the cost advantages of being brownfield. So, given the scale of those, our plan is to shift those brownfield expansions in front of CP3. We're still going to permit all of it. But as far as timing goes, the large brownfields will shift in front of the CP3 and Delta. And we're also on top of it, excited about -- and this is part of the scale, the magnitude of the excess capacity production that we're going to be able to achieve on those brownfield expansions. We expect to look just like what we're achieving or better on Plaquemines. And also, I'd layer on that because those brownfield opportunities are much larger, we have a lot more volume that we can contract on a long-term basis at very attractive competitive prices. And so we're going to do, I would say, a significant more amount of long-term contracting as a result of how much larger these opportunities are than we had planned even 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 time line is looking like for entering into an EPC contract for Phase 2?

We've -- keep in mind, the EPC for us has a different role than it does for the rest of the industry that outsources their custom construction for the whole facilities. because we built so much of our facilities starting back with our first project CP1 through manufacturers and fabricators. We, again, starting with CP1 managed and as owners, a huge portion of our facilities. And so the EPC scopes are smaller. We also have built our own internal EPC team that's hundreds and hundreds of very specialized, we think, high performers for all our scopes. And so we manage execution. We're doing it at Plaquemines, and we'll do more of it at CP2 and so the role of EPC is much smaller for our projects. We've been working in engineering, procuring with Worley at CP2, and they've been an active partner for us. And so we expect to layer on additional EPC contracts here in coming months. But we're working closely now with EPCs and very large subcontractors performing massive scale of work. We're -- as we described, $5 billion into CP2 as well already. So, there's a huge amount of activity with a large number of contractors that's been ongoing for a couple of years now.

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 is the vast majority of the CapEx expense. The brownfield projects that were -- that we talked about earlier on this call are in permitting right now. And so the bulk of the expense will be CP2. We will have some other expenses related to growth, but the bulk of it is going to be CP2. And Jack, did you have additional that you wanted to add as well?

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.

Great. Thanks for that. That’s all I have today.

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.