Venture Global, Inc. (VG) Q2 2026 Earnings Report, Transcript and Summary

Hello, everyone. Thank you for joining us, and welcome to the Venture Global, Inc. Second Quarter 2026 Earnings Conference Call. [Operator Instructions] I will now hand the conference over to Ben Nolan, Senior Vice President of Investor Relations. Ben, please go ahead.

Thank you, Trevor. Good morning, everyone, and welcome to Venture Global, Inc.'s Second Quarter 2026 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 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 may 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, which we may refer to simply as EBITDA during this call. A reconciliation of these metrics to the most relevant GAAP metrics, 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.

Thank you, Ben. Good morning, everyone, and thank you for joining us today. We are pleased to share our second quarter 2026 results. I will begin the call with an overview of our key accomplishments in the quarter and an update on the business. I will then make some remarks on the LNG industry, before turning over the call to Jack, who will provide a more detailed review of our financial results as well as updated guidance for 2026. Following all prepared remarks, we'll open the call to Q&A. On Page 5, you can see some of the highlights for the quarter, including our largest ever quarterly EBITDA of $2.5 billion and significant growth in volumes, revenue, income from operations, net income and EBITDA year-over-year. We are increasing our 2026 EBITDA guidance to $8.7 billion to $9.1 billion, from $8.2 billion to $8.5 billion, based on current market outlook for the remainder of the year. Given outsized LNG price volatility related to events in the Middle East, we have maintained a broader-than-usual guidance range than in the past. As we contract the remainder of our expected volumes for the year, we expect to tighten this range following third quarter. Jack will discuss these numbers in greater detail in a moment. Turning to Page 6. In the second quarter, we exported 127 cargoes, while maintaining our incredible record of safety. Commercial momentum continued in the second quarter where we executed over 2 MTPA of new or increased LNG offtake agreements with new and existing customers, including TotalEnergies, Vitol, EnBW and Atlantic-SEE. The market has welcomed Venture Global's ability to offer customers optionality in uniquely contracting short, medium and long-term volumes. I'm also proud to highlight that we exported our 1,000th cargo just 4 years after Venture Global's first cargo in the first week of March 2022. The team has worked tirelessly to make us the safest, most efficient and best-performing LNG company in the industry, and we now have the track record to prove it. These efforts, along with the investments, innovations and process improvements we have made to our machines, position Venture Global well to export our next 1,000 cargoes in a fraction of the time. And in just a few years, we should be exporting more than 1,000 cargoes every year. With our continued operational and commercial execution, we are confident in the resiliency of our cash flows. On that basis, the Board has recently approved an increase in our quarterly common dividends to $0.04 per share, a 122% increase. We are pleased to show this dividend growth and reward our shareholders. This quarter, we were very active in optimizing our capital structure and reducing our capital costs. We refinanced several tranches of term loans, bonds and even preferred equity, which totaled more than $5.3 billion of capital cumulatively and should reduce our annual interest and coupon obligations by more than $100 million. We added a new $1.5 billion term loan against our 9 LNG carriers, which have previously been funded by cash. We appreciate our capital partners and the team who has worked tirelessly to bring all these transactions together. Venture Global has now raised or refinanced more than $103 billion of capital. Moving to Page 7. Our contracted position for 2026 has increased markedly to over 91% of the portfolio from the 84% previously reported on our first quarter earnings call in May. The 127 cargoes produced in the second quarter were at the high end of our expected production range and we are tightening and raising the midpoint of the cargo range for the full year. While normal seasonality does impact production during warmer months, I do think it is worth noting that we have made operational and capital investments to reduce the adverse impact of summer temperatures, which you can see is demonstrated in our relatively stable production profile. Rather than artificially increasing LNG production by deferring maintenance to capitalize on stronger market demand, our solid production performance during the summer months reflects our ongoing focus on innovation and operational improvement. In fact, instead of postponing maintenance, we completed significant planned work during the quarter, including hot gas path inspections on the gas turbines at Calcasieu Pass, activities that would typically require substantial production downtime at most LNG facilities. Given our modular configuration and built-in redundancies, the impact of maintenance on our LNG production was inconsequential. Importantly, we are still early in our optimization journey and expect to debottleneck and deliver further enhancements to our output and operational performance over the coming years. Turning to Page 8. Our in-house engineering, procurement and construction team is working hard to safely keep CP2 on time and on budget. Now just over a year from FID, which was July of last year, July 28, the project has roofs raised on all 4 LNG storage tanks, 16 fabricated liquefaction modules on site and 5 with the gas and steam turbines that made up the power plant on foundations. For those power plants, we are assembling our heat recovery steam generators, the HRSGs, off-site at our Morgan City facility in Louisiana. We have now built and transported 5 HRSGs to CP2. You can see one of them arriving and on the barge at CP2 in the picture here, which is no small task as they are 9 stories tall and each weighing more than 1,500 tons. This is the first time we have built our own HRSGs, which are some of the largest modular HRSGs ever built. By taking this scope in-house and managed by our internal EPC team, we have removed one of the major bottlenecks in our construction schedule, which should streamline our time line to first LNG. On Page 9, we have our bolt-on expansions at CP2 and Plaquemines. In May, we filed an application with FERC for the expansion of CP2, which would be entirely within the existing CP2 footprint. We were pleased to receive a prefiling waiver from FERC and have already ordered long-lead equipment such as power modules and liquefaction trains from our long-standing partners at Baker Hughes. We expect to make a final investment decision on the 10 MTPA expansions in early 2027, with first LNG production at the CP2 expansion in late 2028. For the Plaquemines expansion, you can see the first phase of our bolt-on expansion plans depicted on the slide. As previously disclosed, we expect the first phase to include 8 liquefaction trains producing 6.4 MTPA of LNG. We filed to permit the full 31 MTPA expansion of Plaquemines to be constructed in multiple phases late last year and are targeting FID in the first half of next year with production from Phase 1 in 2029. To facilitate the expansion of Plaquemines, we expect to build a new pipeline to North Louisiana, called Cloud Connector. And once producing from Phase 1, our run rate production across all 3 projects is expected to be approximately 85 MTPA. As you can see on Page 10, we currently have around 53 of this 85 MTPA committed under long and medium-term contracts. Notably, 100% of our nameplate capacity across our first 3 projects is contracted. The additional 32 MTPA available for marketing is comprised of excess capacity and the addition of the CP2 and Plaquemines Phase 1 bolt-on expansions. We continue to maintain a portfolio approach and anticipate contracting the majority of this capacity through both a mix of long-term agreements to support new financing and medium-term contracts designed to enhance returns and retain flexibility. To help understand the portfolio approach I just described and the option value it creates for Venture Global, on Page 12 we show the frequency distribution of implied liquefaction fees between the emergence of shale gas into the U.S. market from 2010 to today. As you can see, after adjusting for the cost of gas as well as conservative shipping and logistics costs, the average liquefaction fee would be over $6 per MMBtu. While that does include several periods of significantly elevated prices, it also includes the COVID-related downturn of 2020. And even adjusting for those, the median fee would still be nearly twice that of a 20-year contract price. And inevitably, those periods of elevated pricing take place a few times a decade. This substantial spread with asymmetric extrinsic option value highlights the premium available for short- and intermediate-term contracts in the LNG market. We believe our contracting approach and balanced portfolio provide downside protection with the ability to monetize our available LNG capacity at long-term rates establishing a pricing floor. At the same time, our blended portfolio approach provides flexibility to capture materially better returns on medium-term contracts and remain in a position to harvest outsized returns on shorter-dated contracting during periods of cyclical strength. These consistently higher blended returns influence our capital allocation decisions as we believe retaining and monetizing the additional upside option value from a balanced portfolio dramatically enhances the cash flow and absolute value of our LNG assets. Turning to Page 13. While LNG supply has, of course, been impacted by the events in the Middle East, demand has been resilient. As you can see, most of the substantial Asian markets have experienced a meaningful rebound in imports following the initial impact of elevated prices with recent months higher on a year-over-year basis. High temperatures in both Asia and Europe have driven greater power demand and industrial demand from sectors like the fertilizer market has also proven to be inelastic. Importantly, as you can see here, European gas inventories remain well below normal levels, which will likely drive higher winter demand and pricing. In fact, Europe is increasingly approaching a point at which it is exposed to severe winter weather, dangerously exposed, both physically and economically. Now I'll turn the call over to our CFO, Jack Thayer, who will review the quarterly performance, provide an overview of our project performance and discuss our updated financial guidance.

Thank you, Mike, and good morning to those of you on the line. I'll be referring to the Venture Global, Incorporated Form 10-Q for the quarter ended June 30, 2026. The 10-Q is available on our website and some of the key results are summarized on Page 15 of the presentation. During this call, I will highlight results I believe are salient to this audience, and I encourage you to review the entirety of our financial statements in detail. Beginning with revenue, our top line was $4.6 billion for the second quarter of 2026, a $1.5 billion or 48% increase from the $3.1 billion during the equivalent period in 2025. This increase in revenue was driven by $1.3 billion from higher sales volumes, 466 TBtu in the second quarter of 2026 compared with 329 TBtu in the second quarter of 2025, and $102 million from higher net LNG sales prices. Our income from operations was $2.2 billion in the second quarter of 2026, a $1.2 billion or 111% increase from $1.0 billion in the second quarter of 2025. This shift was primarily driven by the higher sales volumes I previously mentioned, augmented by higher LNG sales prices net of the cost of feed gas. Our operating and maintenance costs were $118 million (sic) [ $114 million ] higher, respectively, year-over-year due to the increased commissioning work at Plaquemines and from more Venture Global owned ships being in operation. G&A expenses were largely unchanged year-over-year despite a larger headcount. Our development costs were lower than the same period last year as we were able to capitalize more costs associated with CP2 and our pipeline and bolt-on expansions. Our net income attributable to common stockholders, which we refer to as net income, was $1.3 billion for the second quarter of 2026, a $979 million or 266% increase from the $368 million in the second quarter of 2025. Higher interest expense was offset by favorable changes in interest rate swaps, and income taxes were higher due to an increase in net income. Shifting to consolidated adjusted EBITDA, we earned $2.5 billion during the second quarter of 2026, a $1.1 billion or 79% increase from $1.4 billion in the second quarter of 2025. This increase in consolidated adjusted EBITDA was driven chiefly by higher sales volumes as well as higher LNG sales prices net of the cost to feed gas. Our EBITDA margin was 54% for the quarter as higher volumes and better pricing was not accompanied by commensurate increases in costs. Once again, this quarter, our treasury team was busy, refinancing $5.3 billion since our last earnings call. In June, we refinanced $2.25 billion of Venture Global Incorporated senior secured notes, and we raised $1.5 billion in vessel financing. In July, together with our partners at WhiteWater, we repriced the $1.07 billion senior secured Term Loan B. As Mike mentioned earlier, we are expecting our refinancing efforts thus far in 2026 to have saved more than $100 million in annual interest costs and preferred dividend coupons. As you see on Page 16, we are providing a consolidated adjusted EBITDA guidance range of $8.7 billion to $9.1 billion for 2026, which is up from $8.2 billion to $8.5 billion when we reported in May, and conservatively reflects the current market volatility. This range contemplates a current market liquefaction fee of $12.50 to $13.50 per MMBtu for cargoes remaining to be sold in 2026. This conservative range represents a modest discount to the current TTF and JKM forward price expectations. On average, if fixed liquefaction fees over the remainder of 2026 increase or decrease by $1 per MMBtu, we expect our consolidated adjusted EBITDA range to adjust accordingly by $180 million to $210 million, reflecting our accelerated pace of contracting and our 91% contracted position. Lastly, before turning it back to Mike, on Page 17 we walk through the capital allocation priorities we laid out last quarter, funding expansion, strategic deleveraging and balance sheet optimization and return of capital. First, as we discussed, we're making excellent progress, not only in the construction of CP2 but increasingly on the bolt-on additions at both CP2 and Plaquemines, having already made material equity contributions to both expansions. Second, with respect to the balance sheet, I just walked through some of the refinancing measures we have taken. And through July of this year, we have repaid $1.4 billion of debt, including about $1.3 billion of the bridge loan at CP2 and reduced our annual interest and coupon obligations by more than $100 million. With COD of Plaquemines in Q4 and with the start of production of CP2 next year, we anticipate positive developments with respect to our credit ratings. Lastly, this morning, we announced a 122% increase in our dividend to $0.04 per quarter. Over the longer term, we believe our portfolio of high-return bolt-on opportunities will remain an attractive avenue for future investments. However, the relative scale of the incremental capital investment is expected to decline compared to our growing cash flows, creating more opportunities for other capital allocation priorities. Specifically, we plan to continue to retire and refinance higher-cost capital as bonds mature or are callable. We are confident in the resiliency of our cash flows and expect to grow our dividend over time. Additionally, we may also pursue share repurchases as other incremental means of enhancing shareholder value and returns as our capital program matures. I'll now turn the call back over to Mike.

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

[Operator Instructions] Your first question comes from the line of Manav Gupta with UBS.

Congrats on a good quarter. I just wanted to talk a little bit -- also congratulations on raising the dividend. Those things matter, and your comments on potential share buybacks. Those are all very positive. I wanted to talk a little bit about your guidance raise. Can you help us understand some of the drivers of the guidance raise? Because the way we are thinking about it, sir, is you started the year at a guidance and now this guidance is almost 60% higher than your original guidance. So if you can help us understand drivers of the new guidance raise here.

Sure. Thanks, Manav. The basis, obviously, of all of it is our -- the execution by the team and the production at our facilities. And so we continue to be confident of the quality of the continued production that we expect for the balance of the year. I made a few comments about how we are able through significant maintenance activity, continue to produce well. And we highlighted those comments because it really is pure kind of operational demonstration of the uniqueness of the configuration of our facilities where we have multiple gas turbines not embedded directly in large liquefaction trains, but in multiple power plants that provide electricity for electrically driven compressors in our liquefaction trains. So it gives us maximum redundancy and availability even through maintenance. So we're pleased to see a demonstration of that execution. We obviously have had a lot of volatility this year in the macro markets for LNG pricing. And the combination of just confidence in production and what we are anticipating conservatively, as Jack said, the markets to look like for the remaining of the year, feel good about increasing the absolute level of the cash EBITDA generated for the year, which, on the upper end, moving past $9 billion is something that we're very proud of.

My second follow-up here is, obviously, the global markets are disrupted. You are one of the few people who's ramping the projects absolutely at the right time, so you can supply more next year. I'm just trying to understand, you have quantified on Slide 16, the impact of $1 liquefaction on 2026 EBITDA, $180 million, $210 million. I'm not looking for exact number, but how should we think about this number as things stand? How much would the liquefaction fees $1 movement change 2027 EBITDA? If you could give us some puts and takes on that, that will be very good.

I think, Manav, on Page 23 in the presentation, we actually answer that question for not just '27 but '28 and '29. And do we go to 2030 as well?

No. It's till 2029.

Yes. And so it...

It's $650 million to $700 million for '27.

Yes. That's a great chart because it shows the magnitude of the growth that's coming just from executing on CP2 and the brownfield expansion at CP2 and the first small expansion at Plaquemines.

And importantly, Mike, it contemplates the COD at Plaquemines Phases 1 and 2 as well. So with a greater contracted position, we're still maintaining significant optionality and exposure to the prevailing markets in a positive fashion.

Correct. As of now, we remain on schedule for and expect to be for Plaquemines CODs, Phase 1 and Phase 2.

Our next question comes from the line of John Mackay with Goldman Sachs.

I wanted to pick up on some of the macro comments. Look, I think the disruption in Middle East has gone on longer than we all would have anticipated. I'd be curious to hear from you just how your customer conversations have changed over the past, let's say, couple of months and how that is playing into your view around forward selling cargoes, either on a kind of prompt basis or maybe out to some of these 5-year contracts?

So it's a really interesting question. We obviously are thinking about it every day. If you go back to right before the recent conflict started in the Strait of Hormuz, and if you recall, the net spreads in the market that we are realizing were $5 to $6, closer to $6 net spreads prior to shooting. At that point, we are very busy on 20-year contracting activity and discussions. And we have continued to be very busy and are active, and actually a significant number of negotiations on 20-year contract basis. You've seen us do several billion dollars of 5-year deals and we continue to have and are active in those discussions as well, and expect to have multiple deals completed between now and the end of the year. Obviously, that's a forward-looking statement. So it's busier. I would say there has been an uptick in interest on the 5-year term and less in the last 90 days. So as this conflict has become more difficult to predict, I think there's been a -- I was going to say slight, but maybe a little more than slight uptick in shorter-term contracting interest.

I appreciate the thoughts there. Second quick one for me, going back to that kind of forward look on the volume outlook and the margin impact. The volume impact is up relative to how you framed it up last quarter. Can you just walk us through that? Is that FID timing? Is that CP2 in service timing? What are the puts and takes?

For the increase in the number of cargoes, is that your question?

Correct. Yes.

I think it's really just as we continue to progress through the later stages of Phase 1 of Plaquemines, our confidence as we continue to operate there gets better. And obviously, we continuously generate massive amounts of process data as well, that supports a lot of our analytics about production, forward production. And as we described in, I think, in July, we passed our 1,000th cargo. So it's just there's a huge increase every month in our operational knowledge that allows us to make those refinements. And that includes having these, obviously, on planned maintenance that we perform frequently. And as we get through that activity, that also gives us more clarity on what forward production can be. We mentioned a little bit in the comments about increased confidence in warm weather production at Plaquemines, and that's something we're very pleased with. And that's a part of it as well.

Our next question comes from the line of Jean Ann Salisbury with Bank of America.

Thanks for the new slide around historical distribution of the liquefaction fee and the discussion around the balanced portfolio approach. What is kind of your latest thinking around your ideal steady-state mix of long-term contracts, medium-term contracts and uncontracted in your book? And how far away is it from what your mix looks like today?

So our plan and our target is to largely contract -- and which we've already done on the nameplate capacity, largely contract all of the excess capacity production on a multiyear basis. And we have several years of commissioning cargoes, both from CP2 and from the bolt-ons that are coming. And those for several years will give us nice exposure to that upside option value that, that slide refers to. And so ideally, and we expect to be able to do it, the excess capacity will be largely all contracted on a multiyear basis. Where when you look at the total portfolio, we are overweighted in 20-year contracts. So while we are going to do more 20-year contracts, our emphasis is going to shift more to much shorter contracts for the balance of that portfolio to drive the much higher price. And as the data in that slide, we think, is really fascinating and that it shows -- it really explains a lot of the portion of the market that's occupied by the trading companies that contract and buy from producers and on sell to the market. And when you look at over the course of that time, many of those traders started out as primarily building and producing their own facilities and volumes, and since then have grown bigger businesses and contracting from other producers that are taking the balance sheet risk to build that capacity. And it's exactly for the map that's shown over the last 16 years here that there's more than double the value over the last 16 years, for having shorter-term contracts than the 20-year contracts. And we think 16 years is a great data set. And we think that, that -- some version of that, going forward, is going to continue and be reflected in pricing. So the combination of us contracting all of our nameplate capacity, which supports investment-grade credit ratings treatment at our projects, but retaining more of the extra production capacity that we have on a shorter than 20-year capacity, captures that higher option value and is the right combination of portfolio mix that will maximize the return over time. And it's been the case for the last 16 years and we think it will continue. And I think the behavior and activity of the very large trading market demonstrates that the market thinks that's the case, too.

That makes sense. And did the Plaquemines Phase 1 bolt-on timing FID move up from just like 2027 to now 1 half -- first half of 2027? And what drove that? Was it customer demand?

We've been -- for a while, we've been looking at -- we've been -- we've had our eyes focused on the first half of 2027. We think the customer demand can comfortably support that. And the constraint is not going to be the timing of the offtake contracts.

Our next question comes from the line of Elvira Scotto with RBC Capital Markets.

I just wanted to follow up on a couple of the questions. I guess the first one, on the expansion projects that you are going to do on CP2 and Plaquemines, what is your targeted contracting strategy there? Is that -- are those expansion projects going to be long-term contracts or mix?

There'll be -- that's a great question. It will be a mix. When you look at the timing that we just described, you'll notice that they come online fairly quickly, because they're true brownfield that benefit significantly from the existing installed facilities, the time from FID to production is much shorter, even faster than what we've been able to achieve to date and may, in fact, set new records on timing. It gives us extra flexibility on the mix of term that we need for the contracts and doesn't require as many of those to be 20-year contracts. So we will do some 20-year contracts, but it'll have more midterm contracts than projects have been able to execute successfully in the past. Generically, the project finance in the LNG business is designed around needing $10 billion to construct facilities and you don't get any revenue or profits for 6, 7, 8 years on average. And that -- securitizing 20-year contracts and amortizing construction loan bank debt over 20 years is a requirement to make the math work. When you are 18 to 20 months, between FID and production, it's a much different formula and gives you more flexibility in financing and also creates an opportunity to drive much, much more significant returns on capital.

Great. And then I know you talked about this a little bit, but maybe go into a little bit more detail. You increased your dividend 122% to $0.04 a share. What was the rationale for that increase at this time? And then you talked about your broader capital allocation strategy. But given this increase, how should we think about the dividend going forward?

A lot of it was largely just we were significantly below the rest of the group on an absolute and a percentage yield basis. And even after this increase, that's the case. And that's obviously just because we only recently started a dividend. And so it's just part of the catch-up. And our plan is to continue to grow the dividend over time. It's a reflection also of our maturity of our growth in our businesses as we passed $60 billion in assets and we feel good about the progress of turning on CP2 and the -- and a giant increase in the execution of all the 20-year contracts that are associated with CP2 that we can -- we feel very comfortable in absorbing that. As Jack described in his comments, in the future, too, that could be combined with not just dividend increases, but also potential share buybacks that obviously will be part of the discussion, as Jack described.

Our next call comes from the line of Zack Van Everen with TPH Research.

Maybe the first one, we saw Williams sanction a project, the Delta Access project. It does appear to be heading the direction of Plaquemines. I was curious if that is going to help feed current or future feed gas or if your own Cloud Connector pipeline is enough on the pipeline side?

Jack, do you want to take that question?

Sure. So as you surmised, that's headed directly towards our Plaquemines facility, and we would expect that pipeline to connect into our Cloud Connector pipe, and we have capacity on that pipe.

Got it. Makes sense. And then maybe around that same theme, we've seen a significant increase in power demand and power projects around Texas and Louisiana. How do you guys think about supply contracts with producers, maybe with longer terms, just to make sure you have that -- not only the FT, but also the supply secured for your contracts into the future?

I'll make some comments and Jack, if you want to -- if I miss some things, jump in. The -- we're always in the market negotiating and contracting a mixed blend of gas supply, and we do it opportunistically. And so, yes, we keep a careful watch on that. Our view is that there's plenty of gas to support the domestic demand, both for LNG domestic production and also incremental demand that will layer on in years to come from data centers. And we're more focused on the interconnect and transportation and pipeline capacity to access the plentiful gas. And so you've seen us make significant and meaningful investments in this area, and we'll continue to do some of that. And that was part of the long-range planning that you saw play out for us with the significant investment in our nitrogen removal unit at CP2. Several of those large units are sitting on foundations. Last Saturday, I saw the second rolling on the foundations down at CP2. And in addition, the longer CPX lateral, which approaches 100 miles down to Silsbee and our beautiful Blackfin pipeline that we partnered with WhiteWater that heads to Katy and our transportation agreements that take us all the way to the Waha. And so it's -- we've been focused on this, I think, a few years ahead of the rest of the market, and feel in a very strong position and continue to spend a significant amount of our time on kind of medium and long-term planning on that front. Jack, do you have something to add?

Just 2 quick points, Mike. That was a comprehensive answer. First of all, power plants relative to LNG facilities are relatively small consumers of natural gas. I would say roughly less than 10%, relative to an LNG facility for -- is consumed at a power plant. I think the other comment I'd make is the majority of our pipes are intrastate, which allows us to control 100% of the capacity on those pipes, whether it's our own pipes or whether we're contracting for significant capacity on laterals that connect into our facilities. So the amount of dedicated supply and dedicated delivery that's coming to our facilities, we think, gives us a significant competitive advantage relative to others who are not spending the money to build that dedicated connectivity and are looking to contract on it on a relatively short-term basis, and we'll be more exposed to competing for access to gas over time. We think it's a real strength of our portfolio.

Our next question comes from the line of Craig Shere with Tuohy Brothers Investment Research.

I want to pick up on John's contracting question a bit. I want to confirm that the "multiple more deals anticipated by year-end '26" are indeed 3 to 5 years. And given that kind of increased hedging through decade-end, could that position you for more of a multiyear guidance and capital allocation outlook by first half '27?

So we're uniquely in the market now able to talk to customers about almost any term that customers have need for. Because as we are bringing on Plaquemines to COD, we still retain a large volume of capacity that's not contracted on a 20-year basis. And as CP2 comes online, that's going to increase dramatically. And as you will note from our comments in the presentation today, we have what we think are very attractive schedules for the CP2 and Plaquemines bolt-ons to come online in '28 and '29 as well. And so it gives us tremendous availability that we think is having material positive impacts on the price of LNG globally and gas. And so yes, we're expecting multiple deals of varied terms this year and next year and the year after, of course. So it's -- we've been waiting and watching progress on our projects to get to this point in our growth that would enable us to have that advantage. And the slide that shows the option value, what numbers have been, what page number is the -- I love that. So that's my favorite slide in the deck.

It's Slide 12.

Slide 12 that shows the data for the last 16 years on what pricing has looked at on an average and a median basis over that period. It shows that there's tremendous option value in our configuration and execution, which, frankly, I don't think is captured in our value at all because we, like the rest of the market, have contracted the nameplate capacity of our production. But because of our configuration and our ability to convert the massive amount of data we generate into process engineering that produces significant extra volumes, gives us that upside option value that over time, long periods of time, have proven extremely valuable and well above the long-term contract prices. And as you include just construction cost inflation in projected periods, you have additional floor price support that's still coming. So -- and that -- we think that, that, as I described earlier in my answer, shows up in the behavior of all the trading companies that continue to grow their contracted portfolios. Rather than deploying their balance sheet capacity and capital in building mostly new production capacity, they continue to allocate more of their business and contracting from other producers and on selling it at higher -- much higher prices than the long-term contract prices. And there's a lot of data and really all the data shows that, that, at least in the last 16 years, has been the correct strategy. I answered a lot, more than you asked there. Sorry, Craig. But in your media training, they tell you to do that. So I heard [indiscernible] in there your question.

We agree with the upside not captured in market value, but believe the 3- to 5-year contracting does start to capture that. And to the degree the post Iran conflict medium-term contracting increases relative to what had been open cargoes relative to what was a shorter-term contracted before, we just felt that, that opens up the opportunity to start thinking about a more clarified multiyear outlook that could help unleash some of that side we're just talking about. Maybe you could kind of provide thoughts on that. But to finish off my second question, some of these figures, I think, are starting to bleed together a bit. You mentioned 6 MTPA medium-term guided contracting. But I think that includes the 1.5 MTPA foundation Calcasieu Pass contracts that includes 1 MTPA rolling off in April '28. So you could be legging into some nice medium-term margin uplift on a variety of levels here.

No. We agree, and we think about it every day as we plan and schedule our investments in growth. I think the first stop in thinking about the -- your comments on the multiyear projection is really what the actual physical production capacity curve looks like. We load roughly, what are we doing 43 cargoes a month or so today. That's going to more than double as we turn on CP2 and add these bolt-ons in 2, 2.5 years. So that's a massive increase on already a very large LNG production business in a short amount of time to have a doubling in scale. And you can layer on multiple pricing scenarios on top of that. And on Page 23, we're trying to show what that looks like. And we're coming upon, as we turn on the facilities, tremendous increase in production capacity. And we think the way that the market, meaning the commercial contracting customer market is executing their portfolio strategies shows that there's a more bullish view than a pessimistic view on expected prices that we believe will drive very nice returns, very, very nice returns on our investments and produce a lot of increases in cash generation in the next few years.

Our next question comes from the line of Wade Suki with Capital One.

Just kind of curious if you maybe could discuss what might be kind of holding you guys back from maybe narrowing the time line on CP2 startup or moving it forward, what those toggles might be?

We're -- I mean, these are very large complex construction projects and have tens of thousands of scopes. And so we're just being disciplined and being conservative. The market, you've seen how we've executed on a timing basis, the first LNG for Calcasieu Pass and Plaquemines, was 29 and 30 months, respectively. And so we've done it before. The first LNG train, as you've heard us say and know at CP2 is going to be the 55th train that we've done. So the teams have executed these configurations a lot now, and it's going extremely well from an execution standpoint. We're just being disciplined and conservative at this point on how we're providing guidance. Obviously, we're very careful when we say the second half of next year. In our definition, the second half of next year starts July 1 and goes to December 31 of next year. That's a pretty broad range. And -- but we're being precise in kind of the language. But we're also sprinkling in, and you saw it in the commentary here, the data points about the progress at the site. July 28, just a few days ago, a little less than 2 weeks ago, was the 1-year anniversary at CP2. And most projects after 12 months may still be doing -- finishing engineering and doing test piles. And we have complete modules sitting on foundations being integrated and having cables pulled. And so CP2, knock on wood, in addition to our focus on safety, is progressing as well as an LNG facility has ever progressed. So we're being disciplined. We obviously know as the market investors contemplate the next couple of years, the significance of the timing of when CP2 turns on. And so it's certainly tempting for us to provide more detail on it. But for the moment, we're being conservative. But it is going very well.

Mike, that makes sense. So there's some upside to Slide 23, is what you're telling me. Switching gears a little bit, if you don't mind, just to maybe dovetail on some of the prior questions on contracting. And I'm speaking maybe more industry-wide, not talking you guys specifically, but it seems to be sort of a lack of fewer longer-term 20-year contracts signed this year, just industry-wide, at least from what I've seen.

Yes.

I'm just wondering if you could maybe give us a little bit more granularity on what your kind of commercial conversations are like and to the extent you can sort of parse that out by customer type, region, developed world, developing world, that would be helpful.

There definitely is a rhythm to the conversations with customers, not just for us, but the whole market. When you do multibillion-dollar 20-year contracts, they typically happen after years of conversations. And so they very often are -- the timing of concluding those contracts are not being driven by current macro environment, but just the byproduct of multiyear conversations and contract roll-off by utility customers that are doing very long-range planning. And so you can't -- sometimes you can't -- and you shouldn't read too much into the macro relationship with contract announcements. For us, the contracting activity has remained very steady all the way from last year to today. And we feel really good about the cadence of those conversations and matching up with how we want to continue to contract our portfolio. The -- it's pretty broadly distributed between Europe and Asia. Europe was running a little bit ahead, I think, last year of the pace of Asian contracting. And I think today, the Asian contracting is -- this is very general, has caught up with kind of the number of -- and level of interest from Europe. The demand -- on the demand side, it remains very, very positive. You continue to see periodically new announcements on regas terminals and power plants. China continues to make very, very significant progress in construction of regas terminal capacity. That's a very, very significant percentage of the global -- the total global LNG market. And you're starting to see a lot more global announcements of very large-scale data center demand that a large portion of which will be gas-fired electricity. And so there's still a lot of growth coming internationally in our view on top of the very strong trend being driven by growing global middle class that has the same typical demands that we've seen over decades as the rest of the world that as you start with a lot of coal production capacity and layer more gas on top of it, and we see that strong trend continuing. And new demand on top of it that will be significant in certain markets for data center demand.

We have time for one more question. Our final question comes from the line of Sunil Sibal with Seaport Global.

So I wanted to understand a little bit about the longer-term capital allocation strategy. Obviously, you've raised dividends and I think you also talked about share buybacks. And then you've talked about investment grade at the full consolidated level also in the past. So I was curious, and especially when you look at stock buybacks versus investment-grade ratings, how do you prioritize those 2? And then maybe in the context of that, you obviously have in the capital structure, some junior debt also. So how do you think about that also in that context?

So as Jack mentioned in his comments, the the growth of our LNG production and how that translates in coming years to increase cash generation, as I described a moment ago, in the next couple of years or so, we'll double from our current production capacity. Even in a pretty broad range of sale contract pricing, we generate a lot of cumulative cash, tens of billions of dollars of cumulative cash, in the next few years. And so it gives us the cash generation that supports continued growth that we've been describing. But it also continue -- it supports investment-grade path at the project levels and at the parent level. It supports dividend growth and support stock buybacks in the future. It's just the incremental scale of the production, the new production that we've described, is just getting smaller on a relative basis to the scale of our earning assets. We're passing $61 billion, $62 billion of assets. And if you look at -- I think we've added $8 billion plus this year and, year-on-year basis, around $15 billion, and that general path is going to continue for a few years. So we just start building a big earning asset base that generates a lot of cash. If you look at our absolute levels, we're -- our first -- the cargo target we loaded was the first week of March 2022. And here we are in 2026 projecting $9 billion of cash EBITDA this year. That's material. And so it's just a -- it's a big, big amount of LNG volume.

Understood. And then on the arbitration on Calcasieu Pass, any update there? Obviously, you can't comment on ongoing arbitrations, but I was curious with what we are seeing in the market. Does that help or does that change your view in any way in the last few months with regard to settling of some of those ongoing arbitrations?

So we don't control the schedule of the arbitration processes. Those are controlled away from us. And so we expect resolution of the next one, we thought it would be in the first half of the year. We still expect it before the end of the year. And then we have -- the next one after that, we have a hearing that begins at the end of November and will extend into next year, again, if we don't settle. You've seen us obviously settle several of them successfully. And we remain open and constructive on settling what remains outstanding, and we remain optimistic on being successful in working through them.

We have reached the end of the Q&A session. I will now turn the call back to Mike Sabel, CEO, for closing remarks.

Thank you, everyone. We appreciate your time this morning and look forward to answering follow-up questions and look forward to seeing many of you in person in coming months.

This concludes today's call. Thank you for attending. You may now disconnect.