Q4 2023 New Fortress Energy Inc Earnings Call

Okay.

Operator: Ladies and gentlemen, thank you for standing by. You're currently on hold for the New Fortress Energy fourth quarter 2023 earnings call. At this time, we are assembling today's audience and plan to begin shortly. We appreciate your patience and ask that you please remain on the line.

Speaker Change: Ladies and gentlemen, thank you for standing by your currently on hold for the New fortress Energy fourth quarter 2023 earnings call. At this time, we are assembling today's audience and plan to be underway. Shortly we appreciate your patience and ask that you. Please remain on the line.

Speaker Change: [music].

Operator: Good morning, everyone, and welcome to the New Fortress Energy fourth quarter and full year 2023 earnings conference call. Today's conference is being recorded, and all phone participants are in a listen only mode, but later we'll have the opportunity to ask questions. To get us started today with opening remarks and introductions, I'm pleased to turn the floor over to Managing Director of Strategy and Investor Relations, Mr. Chance Pipitone.

Speaker Change: Okay.

Speaker Change: Good morning, everyone and welcome to the New fortress energy fourth quarter and full year 2023 earnings Conference call. Today's conference is being recorded and all phone participants are in a listen only mode. But later, we'll be have the opportunity to ask questions.

Speaker Change: To get US started today with opening remarks, and introductions I'm pleased to turn the floor over to managing director of strategy and Investor Relations. Mr. Chance Pepitone. Please go ahead Sir.

Chance Pipitone: Please go ahead, sir. Thank you, Lisa, and good morning, everyone. Thank you for joining today's conference call, where we will discuss our record fourth quarter and full year 2023 results, recent developments, operational highlights, and future here at NFU. As Lisa said, the call is being recorded and will be available by replay on the Investors section of our website under the subheading Events and Presentations. In that same location, you will find a press release regarding our fourth quarter and full year results and the corresponding presentation that we'll walk through on today's call. As we proceed through the discussion, we will be referring to that presentation, and in that same presentation, you will also find a series of important disclosures related to forward-looking statements and non-GAAP financial measures.

Chance Pipitone: Thank you Lisa and good morning, everyone. Thank you for joining today's conference call, where we will discuss our record fourth quarter and full year 2023 results recent developments operational highlights and future here at NOP as Lisa said the call is being recorded and will be available by replay on the investors section of our website under the subheading events and.

Chance Pipitone: Patients in that same location you will find our press release regarding our fourth quarter and full year results in a corresponding presentation that we'll walk through on today's call.

Chance Pipitone: As we proceed through the discussion we will be referring to that presentation and then that same presentation. You will also find a series of important disclosures related to forward looking statements and non-GAAP financial measures. We encourage participants to review. These important disclosures. In addition to the description of risk factors contained within our SEC filings.

Chance Pipitone: We encourage participants to review these important disclosures, in addition to the description of risk factors contained within our SEC filing. Now, let's dive into the call. My name is again Chance Pipitone, and joining me today at New Fortress Energy are Wes Edens, Chairman and CEO, Chris Giunta, CFO, Andrew Dede, Managing Director, and Brannen McElmurray, Managing Director. Thank you. Wes, over to you.

Chance Pipitone: Now, let's dive into the call. My name is again, the chance Pepitone and joining me today are new fortress energy or Wes Edens, Chairman and CEO, Chris <unk>, CFO, Andrew <unk>, managing director and Brannen Mcelmurray managing director.

Speaker Change: Thank you.

Speaker Change: Well, it's over to you.

Wesley Robert Edens: Great. Thanks, Chance, and welcome, everybody. As Chance said, as usual, please refer to the deck that we posted here just a few minutes ago.

Speaker Change: Thanks, a chance and welcome everybody.

Speaker Change: Jan said as usual please refer to the deck that we we posted here just a few minutes ago and that says let's start at the beginning so page three.

Wesley Robert Edens: And let's start at the beginning. So, page 3. 2023 was a very good year, fourth quarter, a record quarter for us as well from an operating perspective. Most importantly, when you look at the second line down, it's not numbered, but it's the second line, the profit from cargo sales, you'll see zero contribution, essentially, from cargo sales in Q3 and Q4, which now fully reflects that our business is operating on the through the terminals to our customers and our sales of So, very, very significant earnings.

Wesley Robert Edens: 2023 was a very good year fourth quarter, a record quarter for us as well from an operating perspective $1 $3 billion in EBITDA $308 million in EBITDA for the quarter.

Wesley Robert Edens: That more than doubled earnings per share in <unk> for 2022 to 2023, and we are poised to roughly double that again this year, so tremendous financial results, but most importantly, when you look at the second line down and so that number but it's a second line the profit from cargo sales, you'll see zero contribution.

Wesley Robert Edens: Obviously, the combination of core earnings at $6-plus a share, along with a 50% growth rate over the last year and projected for this year, plus a 10-plus year duration of our portfolio gives us a significant competitive advantage. We feel very undervalued at these levels, but now, with these results, we think we can go and attack that aggressively. Let's look at page number four. So operational highlights, of which there are many, which we've just condensed into a short page on the absolute highlights. Let's start in Brazil. We came back from Brazil late last night.

Wesley Robert Edens: Essentially from cargo sales in Q3, and Q4, which now fully reflects that our business is operating on the through the terminals to our customers and our sales of gas and products.

Wesley Robert Edens: Sure and so very much for the operating company now from a as opposed to a development company and both the quantity and the quality of those earnings.

Terrific. So it's actually a very very good thing if you look at the bottom when I say funds from operation. This is.

Wesley Robert Edens: The metric that we have borrowed from the real estate business, which we think is actually applicable here simply put it it takes earnings per share and adds back the noncash items like depreciation and amortization what that means is that on our balance sheet right. Now we have many billions of dollars of infrastructure and that's growing so there's a significant amount of assets on balance sheet, just simply adding back.

Wesley Robert Edens: In the news yesterday, you'll see that both the Bacarena and the Santa Catarina terminals are complete and are now hooked up. You know, the market in Brazil is massive. It's a sizable market, you know, based on what we have right now. And the prospects for additional growth are actually quite significant. I won't steal Andrew's thunder, but basically 500 million plus in EBITDA from the existing business is obviously a massive result.

Wesley Robert Edens: <unk> those noncash items gives a more accurate reflection of the earnings power of the company. So when you look at it now of $1 61 in <unk> in 2020 to $3.56 in 2023, six plus dollars is our guidance for 2024.

Wesley Robert Edens: We will talk about Brazil, there's actually a major a major issue for US we have a significant amount of our funds from operations from things that are actually on the books right now that Andrew will talk about in a few minutes that we think takes us to $8 or plus in a couple of years.

Wesley Robert Edens: But that is really the tip of the iceberg when you look at the future potential power auctions which are coming. You know, the combination of our terminals and gas and power gives us a massive competitive advantage. And this is something that I hope that will be appreciated for here in the very, very short term.

Wesley Robert Edens: Run rate basis so.

Wesley Robert Edens: Very very significant earnings obviously, the combination of core earnings at $6 a share along with a 50, 50% growth rate over the last year and projected for this year plus a 10 plus year duration of our portfolio gives us a significant competitive advantage and we feel very undervalued at these levels, but now this is something that with these results.

Wesley Robert Edens: Puerto Rico, which has been a huge part of our success in the last several years, we really highlight the two installations for the FEMA power plants that we built in the middle of last year. These power plants have become essential to the island's energy security, the most reliable power on the island. Brandon runs that business for us.

Wesley Robert Edens: We've added to our already large presence there with these and other initiatives we're working on. We are working with the government closely on many different fronts and are very confident to both grow and continue our business there. FAST LNG, lastly, there's a lot of news around that. So in short terms, you know, we installed the first of our facilities. We expect the first LNG in the month of March and the first cargo in the month of April.

Wesley Robert Edens: We think we can go and attack that aggressively let's look at page number four so.

Operational highlights of which there are many which we've just condensed into a short page on the on the absolute highlights let's start in Brazil, We came back from Brazil late last night and the news yesterday Youll see that both the bok rate cut in the set of kind of arena terminals are complete and R. R.

Wesley Robert Edens: Are now hooked up.

Wesley Robert Edens: The the market.

Wesley Robert Edens: In Brazil is massive it's a sizable market.

Wesley Robert Edens: So obviously, we're at the very, very tail end of that project. And while it's been a little bit delayed, it's important to note that it would still be the fastest LNG installation in the history of the planet. So we are always aggressive in terms of our objectives, but even with it fluctuating a little bit, on balance, we feel very, very good about what we have done. We just recently announced that FLNG2 is now fully financed. Construction begins in April.

Wesley Robert Edens: So self on what we have right now and the prospects for additional growth are actually quite significant I won't steal Andrew's Thunder, but basically 500 billion plus in EBITDA from the existing business is obviously, a massive result, but that is really the tip of the iceberg. When you look at the future potential power auctions, which are coming the combination of our terminals in gas and power. It gives us a.

Wesley Robert Edens: Massive competitive advantage and this is something that I hope that will be appreciated for here in the very very short term, Puerto Rico, which has been.

Wesley Robert Edens: We believe that that facility will be operational in the first quarter of 2026. That's a meaningful step as well because it brings us onshore to a terminal that actually has substantial expansion capabilities as well. You know, linking these facilities to our downstream creates a very, very powerful business model. The entire existing downstream in Puerto Rico and FTA countries makes more than covers the amounts of LNG that we'll produce from these two facilities. And in recent developments, you know, we obviously disagree with the liquefaction pause that the government has taken, but we're the only company, we believe, that's not affected by this as a result of our downstream customers and our ability to export to both Puerto Rico as well as, you know, the other FTA countries. So that's very good.

Wesley Robert Edens: Huge part of our success in the last several years.

Wesley Robert Edens: We really highlight the two installations for the FEMA power plants that we built in the middle of last year. These power plants have become essential.

Wesley Robert Edens: Central to the islands energy security and most reliable power on the island are Brian who runs that business for US we've added to our already large presence there with these and other other initiatives. We're working on we're working with the government closely on many different fronts and I'm very confident to both grow and continue our business there.

Our fast LNG lastly, there's a lot of news around that so in short terms, we installed the first of our facilities and we expect first LNG in the month of March and the first cargo in the month of April. So obviously with the very very tail end of that project and while it's been a little bit delayed it's important to note that it still would be the fastest LNG.

Wesley Robert Edens: Installation in the history of the planet. So we are always aggressive in terms of our objectives, but even with it being slipping a little bit on balance we feel very very good about what we've done we just recently announced that <unk> is now fully financed construction begins in April we've lifted that facility will turn out in the first quarter of 2026, that's a meaningful step as well.

Wesley Robert Edens: Page five, the financial highlights, you know, a very tremendous year in both the quantity and quality of earnings. The one thing I would highlight is this run rate number that we have circled on the right-hand side. That reflects, for the most part, what is already in place in Brazil. So obviously, going from $1.61 to $3.56 to $6 to $8 plus, you know, two years from now when we are fully operational there. You know, the FFO is basically cash flow. We have six plus dollars in cash this year.

Wesley Robert Edens: Because it brings us onshore and a terminal that it actually has a substantial expansion capabilities as well yeah linking these facilities to our downstream creates a very very powerful business model.

The existing downstream and in Puerto Rico, and FTA countries make more than covers the amount of LNG that will produce from these two facilities.

Wesley Robert Edens: And in recent developments, we obviously disagree with the liquefaction pause that the government has taken but we're the only company. We believe this is not affected by this as a result of our downstream customers and our ability to export to both Puerto Rico as well as.

Wesley Robert Edens: And with the two dollars in Brazil and the duration of our portfolio and the competitive advantage we've got in these different markets that we operate in, we feel like the future is extremely bright for us financially. At the same time, you know, growth and net capex have peaked and are expected to decrease significantly in 2024 and below. You can see the net numbers across the bottom of the page go down by roughly 90 percent from 2023 to 2024. So a massive decline in capex. What that means in simple terms is that the operating earnings that we generate will then go to the bottom line for distributable cash flow for us to run the business and manage ourselves going forward. Your page six is a key page for us.

Wesley Robert Edens: The other FTA countries. So that's that.

Wesley Robert Edens: So that's very good news.

Wesley Robert Edens: Page five financial highlights.

Wesley Robert Edens: A very tremendous year in both the quantity and quality of earnings. The one thing I would highlight is this run rate number that we've circled on the right hand side that reflects for the most part.

Wesley Robert Edens: What is already in place in Brazil, So obviously going from $1 61 to $3 56 to $6 to $8 plus two years from now when we are our.

Wesley Robert Edens: Our fully operational there.

Wesley Robert Edens: <unk> is basically cash flow, we have six plus dollars this year and with a $2 in Brazil, and the duration of our portfolio and the competitive advantage. We've got in these different markets that we operate in we feel like the future is extremely bright from us financially at the same time, you know gross and net capex at peak and expected to decrease significantly in 2024 and below.

Wesley Robert Edens: We look at this page. It basically highlights the three pillars of the company, which are basically power, gas, and terminals. Now, think of this.

Wesley Robert Edens: In very simple terms, the terminals provide both the gateway to our markets but are also sustainable competitive advantages that are hard for others to create in a timely manner. It's what gives us so much confidence in the growth of our businesses. On the left side of the power side, you'll see that we are very much a power company. So 8.689 gigawatts of power.

Wesley Robert Edens: You can see the net numbers across the bottom of the page go down by roughly 90% of 2023 and 2024, so a massive.

Wesley Robert Edens: A decline in Capex and what that means in simple terms is that the operating earnings that we generate we then go to the bottom line. After a distributable cash flow for us to run the business and manage our ourselves going forward.

Wesley Robert Edens: So, very, very large power companies that we both own, manage, and provide fuel supply to. The gas in our business right now is largely matched. So our intention is not to be exposed to changes in market price.

Wesley Robert Edens: Page six is a is a key page for us when you look at this page it basically highlights the three pillars of the company, which are basically power and gas and terminals, we think of this.

Wesley Robert Edens: In very simple terms the terminals provide both the gateway to our markets, but are also the sustainable competitive advantage that is hard for others to create it in a timely manner and so it gives us so much confidence in the growth of our businesses on the left hand side of the power side, you'll see that we are very much of a power company. So 8689.

Wesley Robert Edens: And I would say that when you look at our results for the last two quarters of the year, you see a precipitous decline in the world's LNG prices, and our earnings not only were stable, but they were actually growing. So, very, very clear evidence that we are not tied to market prices for LNG. That's not our intention, but the results speak to it.

Wesley Robert Edens: Megawatt gigawatts of power, so very very large tower companies and we both own manage and provide fuel supply to the gas in our business right. Now is largely matched so we actually are our intention is not to be exposed to changes in market price and I would say that when you look at our results for the last two quarters of the year you see a precipitous.

Wesley Robert Edens: The bottom line on the terminals is that while they currently have significant amounts of throughput, they also have significant amounts of potential upside utility. So Jamaica, we only use 10% of our utilization, Puerto Rico, 25%, Mexico, 10%, Nicaragua, 20%, Brazil, 40%. So these terminals have got a substantial amount of upside. They require essentially little or no CapEx for us to move more product through them.

Wesley Robert Edens: This decline in.

Wesley Robert Edens: The world's LNG prices and our earnings not only like were stable, but they're actually growing so very very clear evidence that we're not like tied into market prices for LNG, that's not our intention but the results will speak to it the bottom line on the on the terminals is that while they are they currently have a significant amount of throughput there.

Wesley Robert Edens: Also have significant amounts of potential upside utilities, so Jamaica, we only use 10% of our utilization, Puerto Rico, 25%, Mexico, 10%, Nicaragua at 20%, Brazil, 40%. So these terminals have got a substantial amount of upside they require essentially little or no capex for us to move more product through them. So we think that the.

Wesley Robert Edens: So we think that the combination of power and gas and terminals is a very, very powerful one and gives us a very, very bright future. But the last thing I would say is that there are many companies out there that provide just one of these three elements. They either are a power company, sort of our IPPs, or they invest in power companies, their gas in terms of either owning the gas in the ground, or they own liquefaction. And there are terminal companies or people who operate on a fee basis at terminals around the world. Putting them all together is what allows us to, number one and most importantly, serve our customers because it creates this one-stop solution that is so important to them. So we can actually be attentive to what their needs are.

Wesley Robert Edens: The combination of power and gas and terminals is a very very powerful one and gives us a very very bright future. What the last thing I would say is that there are many companies out there that prefer that provide one of these three elements. They either are a power company silver ipp's or they invest in power companies their gas in terms of either owning the gas and the <unk>.

Wesley Robert Edens: Ground or their own liquefaction and there our terminals companies or people, who operate on a fee basis terminals around the world putting them. All together is what allows us to actually number one and most importantly to serve our customers because it creates this one stop solution that is so important to them. So we can actually like be attentive to what their needs are but number two it gives you a massive competitive advantage of us.

Wesley Robert Edens: But number two, it gives you a massive competitive advantage over others that are trying to do the same thing. So it's a very, very powerful combination. With that, I'll turn it over to Brandon to talk about Puerto Rico.

Brannen McElmurray: Thank you, Wes. Let's move to page nine of the presentation. As Wes so often says, affordable, clean, reliable power is the cornerstone of economic activity, and in that regard, the majority of the world is underserved. There's no better example of this in the U.S. and its territories than Puerto Rico.

Wesley Robert Edens: They're trying to do the same thing so it's a it's a very very powerful combination with that I'll turn it over to Brandon.

Wesley Robert Edens: Brandon you talked about Puerto Rico, Brendan. Thank you, let's move to page nine of the presentation as west So often says affordable clean reliable power is the cornerstone of economic activity and in that regard. The majority of the world is underserved Theres No. Better example of this in the U S and its territories and Puerto Rico, we've been investing in Puerto Rico's infrastructure.

Brannen McElmurray: We've been investing in Puerto Rico's infrastructure since 2017. Following a series of devastating natural disasters, including two hurricanes just two weeks apart, ENEPI began developing critical energy infrastructure in Puerto Rico to improve reliability and lower energy costs for repairs. Our first project was the San Juan Energy Port, converting an existing combined cycle power plant to burn natural gas rather than diesel and constructing a fuel import terminal to support it. Our operations began in 2020 after completing construction in the depths of COVID, a true testament to the dedication of our team and stakeholders. Today, this facility delivers 15% of the power to the PR grid with reliability in excess of 97% while significantly reducing emissions and generating over a billion dollars in fuel savings to rate payers life to date. Most notably, this asset provides ENEPI a significant, sustainable, competitive advantage on which to deliver more value to Puerto Rico through follow-on infrastructure investments such as those we will highlight in the next slide. Turning now to page 10.

Wesley Robert Edens: 2017, following a series of devastating natural disasters, including two hurricanes just two weeks apart and if he began developing critical energy infrastructure in Puerto Rico to improve reliability and lower energy cost for repairs. Our first project was the Sandborne energy port converting an energy converting existing combined cycle power plant to burn.

Natural gas rather than diesel and constructing a fuel import terminal to support it our operations began in 2020 after completing construction in the depths of Covid, a true Testament to the dedication of our team and stakeholders. Today. This facility delivered 15% of the power of the PR grid with reliability in excess of 97%.

While significantly reducing emissions and generating over $1 billion in fuel savings to ratepayers life to date.

Notably this asset provides in S E a significant sustainable competitive advantage on which to deliver more value to Puerto Rico through follow on infrastructure investments such as those we will highlight in the next slide turning now to page 10.

Wesley Robert Edens: Yeah.

Brannen McElmurray: We continue to invest in more reliable, clean, affordable power for Puerto Rico and, in 2023, expanded our presence with two major developments. First, fast power deployments. After a rigorous selection process, NFE was chosen by the U.S. government to build and operate 350 megawatts of fast power across two sites in Puerto Rico in order to stabilize the grid. The first site, Palo Seco, 150 megawatts, is located just a few miles from the NFE terminal, allowing us to easily connect our site to existing logistics chains. NFE was awarded the project in February 23 and delivered power to the grid just a few months later in June, making this the fastest large-scale power project in Army Corps history at the time, which is thanks to the second site, San Juan, 200 megawatts. NFU was awarded the project in April 23 and delivered the power to the grid just a few months later in September.

Wesley Robert Edens: We continue to invest in more reliable clean affordable power for Puerto Rico and in 2023 expanded our presence with two major developments first fast power deployments. After a rigorous selection process and a fee was picked by the U S government to build and operate 350 megawatts fast power across two sites in Puerto Rico and <unk>.

Order to stabilize the grid. The first site palisade grow 150 megawatts is located just a few miles from the NFC terminal, allowing us to easily connect our site to existing.

Wesley Robert Edens: Logistics chain.

Wesley Robert Edens: And if he was awarded the project in February 23, and delivered power to the grids to few months later in June making this the fastest large scale power project and Army Corps history at the time, which is saying something the second site San Juan 200 megawatts and if he was awarded the project in April 23, and deliver the power to the grid just a few months later in September.

Brannen McElmurray: Together, these sites provide 15% of the power to the Puerto Rico grid with reliability in excess of 98%, reduce emissions, and generate hundreds of millions of dollars of savings to rate payers. The second is the privatization of PREPA's thermal generation. NFE's subsidiary, Hanera, won the mandate to manage PREPA's thermal generation fleet for at least the next decade in a rigorous privatization process.

Wesley Robert Edens: Together these sites provide 15% of the power to the grid with reliability in excess of 98% reduced admission emissions and generate hundreds of millions of dollars of savings to ratepayer.

Wesley Robert Edens: The second is the privatization of prep as thermal generation fleet and if these subsidiary scenario when the mandate to manage preface thermal generation fleet for at least the next decade in a rigorous prioritization process and narrowed took over the system July 1st with three goals to increase reliability lower cost to ratepayers and reduce emissions.

Brannen McElmurray: Hanera took over the system July 1st with three goals to increase reliability, lower cost to rate payers, and reduce emissions. I am proud to say that Hanera is delivering tangible wins on each of these three goals during its first year of operation. These two developments continue to build on the work we started in 2017 and further enhance the NFE franchise in Puerto Rico. Moving to page 11.

Wesley Robert Edens: I'm proud to say that <unk> is delivering tangible wins on each of these three goals during its first year of operations.

Wesley Robert Edens: These two developments continue to build on the work we started in 2017 and further enhance the NFL franchise in Puerto Rico.

Wesley Robert Edens: Moving to page 11.

Brannen McElmurray: The majority of Puerto Rico's generation assets are now managed by NFE or our subsidiary, Henera PR. Our footprint consists of 5 gigawatts of power across 17 sites, over 700 employees, and, most importantly, 1.5 million customers. We manage 85% of Puerto Rico's total generation capacity, but 57% of this capacity continues to run on diesel or HFO. This creates a tremendous near-term opportunity for NFE's business. Our footprint allows us to execute on a variety of strategies such as fuel switching, supplemental power, and other fuel optimization initiatives that NFE is well positioned to be the infrastructure provider of choice to deliver value to the Puerto Rico ratepayer. Moving to page 12.

Wesley Robert Edens: The majority of Puerto Rico's generation assets are now managed by in a fee or our subsidiary <unk> PR. Our footprint consist of five gigawatts of power across 17 sites over 700 employees and most importantly, 1.5 million customers, we manage 85% of Puerto Rico's total generation capacity, but $50.

Wesley Robert Edens: 7% of this capacity continues to run on diesel or H F. O. This creates a tremendous near term opportunity for NFS business.

Wesley Robert Edens: Our footprint allows us to execute on a variety of strategies, such as fuel switch supplemental power and other fuel optimization initiatives that and if he is well positioned to be the infrastructure provider of choice to deliver value to the Puerto Rico Ratepayer moving.

Wesley Robert Edens: Moving to page 12.

Brannen McElmurray: NFE continues to engage with the Puerto Rican government, FEMA, the Army Corps, DOE, and other stakeholders on a broad range of topics. We are bringing advanced generation storage technology to Puerto Rico that will improve the level of service for all customers. Puerto Rico has the highest priced and least reliable power in the U.S. and its territories.

Wesley Robert Edens: And if he continues to engage with the Puerto Rican government FEMA Army Corps, Dewey and other stakeholders on a broad range of topics, we are bringing advanced generation storage technology to Puerto Rico that improve the level of service for all customers, Puerto Rico has the highest priced and least reliable power in the U S and its territories the average Puerto Rican customers 600.

Brannen McElmurray: The average Puerto Rican customer is 600 times more likely to be without power than a customer in the mainland U.S. The good news is that this situation can be fixed, and here are just a few of the initiatives we are implementing to address it. We're adding large-scale battery energy storage systems to the grid, reducing the frequency of load sheds by 90%, adding additional generation through peakers and blackstart assets, the first new conventional generation on the island in years, and we're implementing a fuel switch and supplemental power strategy to add megawatts now and ancillary services later to strengthen the grid and make it renewable-ready. We continue to invest in Puerto Rico and expand our franchise there by These projects and the experience they bring can be readily applied to other markets addressing similar challenges, creating opportunity for NFE and other jurisdictions seeking solutions to accelerate the energy transition. This drives value for NFE as the solution provider of choice. I will now turn it over to Andrew to talk about the exciting business he and his team are building in Brazil and the tremendous advances made there.

Wesley Robert Edens: More time, 600 times more likely to be without power than a customer mainland U S. The good news is the situation can be fixed and here are just a few of the initiatives. We are executing on to address it we're adding large scale battery energy storage systems to the grid, reducing frequency of bloodshed by 90%, adding additional generation through pickers in blackstock.

Wesley Robert Edens: Assets, the first new conventional generation on the island years, and we're implementing a fuel switch in supplemental power strategy to add megawatts now in ancillary services later to strengthen the grid and make it renewable ready.

Wesley Robert Edens: We continue to invest in Puerto Rico, and expand our franchise there by adding a central infrastructure. These projects and experience. They bring can be readily applied to other markets dressing similar challenges, creating opportunity for NFC and other jurisdiction seeking solutions to accelerate the energy transition this drives value to NFC as the.

Wesley Robert Edens: Solution provider of choice I will now turn it over to Andrew to talk about the exciting business. He and his team are building in Brazil, and the tremendous advances made there Andrew.

Andrew Dete: Thanks, Brannon. Hello, everyone. Good morning.

Andrew: Brandon Hello, everyone. Good morning, I'm on page 14, and very excited to announce that our broker in a terminal is now operational.

Andrew Dete: I'm on page 14 and very excited to announce that our VARCARENA terminal is now operational. Wes and I were here yesterday and had a great event with the governor of the state of Pará and the minister of mines and energy in Brazil. And we stood on the FSRU and looked back at the shore here, and that was pretty cool to try to highlight how, kind of, from the terminal here, you can actually see the three big contracts that we have. So on the left side here, on top of the page, you can see the El Anorchi aluminum refinery owned by Norse Hydro. That's where we have a 15-year agreement to sell 30 PBTUs. Moving a little bit to the right, our current 630 megawatt power plant, which we call Selba, is 50 percent complete. That will reach commercial operations in July of 2025 and has a 25-year PPA. And then, on the land just adjacent to that, to the right, is where we're going to site the new 1.6 gigawatt plant that we bought from Denham Capital and Selba Energy. That will COD the next year, July 2026, and have a 15-year PPA.

Andrew: Wes and I were here yesterday and had a great event with the governor of the state of Parana and the minister of mines energy in Brazil, and we stood on the Fsrus and look back.

Andrew: And the short here.

Andrew: That was pretty cool to try to highlight how kind of from the terminal here you can actually see the three big contracts that we have so on the left side here on the top of the page you can see the <unk> alumina refinery owned by Norsk Hydro, that's where we have a 15 year agreement to sell 30 T be to use a.

Andrew: Moving a little bit to the right. Our current 630 megawatt power plant, which we called Silva is 50% complete that will reach commercial operations in July of 2025 and has a 25 year PPA and then on the land just adjacent to that to the right is where we're gonna site been new 1.6 gigawatt PPA that we bought from denim.

Andrew: Capital and save energy that was D. O D. The next year July 2026, and have a 15 year PPA.

Andrew Dete: So, super exciting for us on many levels to open this terminal and then also just to be able to kind of see the overall business model, very compact here in one great industrial development. As you can see from the picture, too, what we did here is really extend an offshore jetty. So this is a very cost-effective project, and it benefits from the FSRU Energo Celsius, which we just finished converting in a yard in Singapore. And so FSRU arrived a few days ago, fully hooked up, and we are ready to flow gas in Bacarena, so very exciting. Not to be outdone, the next page is us announcing that the Santa Catarina terminal is now operational. We've obviously been working on both of these for three years, and I think they've been in permitting and development for another five years. And so not totally planned, but they did arrive basically within a day of each other and are getting hooked up also within a day of each other.

Andrew: So super exciting for us on many levels to open this terminal.

Andrew: And then also just to be able to kind of see that the overall business model very compact here in one great industrial development.

Andrew: As you can see even in the picture to you know what we did here is really extended in offshore journey. So this is a very cost advantaged project and it benefits from the FSA or you introduce Celsius, which we just finished.

Andrew: Alicia of converting in a in a yard in Singapore and so emphasis are you arrived a few days ago fully hooked up and we are ready to flow gas and Buck arena, so very exciting.

Andrew: Not to be outdone. The next page is.

We're we're announcing that the Santa Catarina terminal is now operational and we've obviously been working on both of these for three years and I think they've been in permitting and development for another five years and so not totally plan, but they did arrive basically within a day of each other and are getting hooked up also within a day of each other so another great project here.

Andrew Dete: So another great project here. We'll show more pictures of this in the future, but basically, the pipeline here, as you can see, is connected and then actually goes under the water to the left here. And for another 30 kilometers until it connects to the big transport pipeline system in Brazil. So, super exciting terminal for us, a very different dynamic in terms of being connected to this very liquid pipeline system, which we're going to talk about here. I'll now flip to page 16.

Andrew: We will show more pictures on this in the future, but it but basically the pipeline here as you can see is connected and then actually goes under the water into the left here and for another 30 kilometers until it connects into the Big transport pipeline system in Brazil, So super exciting terminal for us very different dynamic in terms of being connected into this very liquid pipeline system, which we're going to talk about here.

Andrew: I'll now flip to page 16, Westwood added to it.

Andrew Dete: Wes alluded to that. You know, we're very, very excited about the opportunity in Brazil. We really believe this is one of the best LNG and power opportunities globally. I'm going to walk through a few reasons for that.

Andrew: When we're very very excited about the opportunity in Brazil, We really believe this is one of the best LNG and power opportunities globally.

Andrew: Walk through a few reasons for that and the other thing to remember is is not only is it one of the best opportunities, but it really is at a scale that sort of unprecedented for NFC. So there are three there are three things that I want to highlight in terms of why we love this opportunity.

Andrew Dete: And the other thing to remember is not only is it one of the best opportunities, but it really is at a scale that's sort of unprecedented for NFE. So there are three things that I want to highlight in terms of why we love this opportunity from left to right. So the first one is the overall demand growth for energy in Brazil. There are many ways to kind of come at this stat.

Andrew: From left to right. So the first one is is the overall demand growth for energy in Brazil, There's many ways to kind of come at this stat, what I really like is the 4% year over year increase in electricity consumption and maybe sounds like a modest number but when you're talking about a grid of 85 Gigawatts, 4% is a huge number.

Andrew Dete: What I really like is the 4% year-over-year increase in electricity consumption. That maybe sounds like a modest number, but when you're talking about a grid of 85 gigawatts, 4% is a huge number. And then we spent a lot of time, even just yesterday, with the Ministry of Energy, and what they're actually forecasting is a need for 20 gigawatts of new dispatchable power by 2032. Brazil has a very interesting grid that might actually be a peek into the future for some of the rest of the world, where almost 80%, probably 75% of the power is renewables and hydro. And so they have a very clean grid and a very low-cost grid, and their problem is actually capacity. And so what they need as they grow is more firm capacity, which is what NFE is set up to provide. The second thing is really the mechanism for acquiring new power.

Andrew: And then we spent a lot of time, even just yesterday with the ministry of energy and what Theyre actually forecasting is a need for 20 gigawatts of new dispatch will power by 2032.

Andrew: Brazil has a very interesting grid that they might actually be a peek into the future for some of the rest of the world, where 80% almost 80% probably 75% of the power is renewables and hydro and do they have a very clean grid and a very low cost great and their problem is actually capacity.

Andrew: So what they need as they grow as more firm capacity, which has been NFU set up to provide.

Andrew: The second thing is really the mechanism for acquiring new power. So Brazil has a great history of of acquiring long term contracts for power capacity.

Andrew Dete: Brazil has a great history of acquiring long-term contracts for power capacity. So, over 35 gigawatts have been awarded in these auctions since 2006, 23 different auctions. In 2024, we expect a new auction for more than 8 gigawatts, and these contracts are very sophisticated because they're highly bankable, and they index the gas price to international LNG prices. So this really is unique for us in the world in terms of a very well set up, well understood, and bankable mechanism to give out long-duration contracts for LNG to power. The third is the robust local capital markets.

Andrew: So over 35 Gigawatts had been awarded and these auctions since 2020 since 2623 different auctions in 2024, we expect a new auction for more than eight gigawatts and these contracts are very sophisticated because they're highly bankable and the index the gas price to international LNG prices.

Andrew: So this really is unique for us in the world in terms of a very well set up well understood and bankable mechanism to get out long duration contracts for LNG to power.

Andrew: The third is is the robust local capital markets and so what we see in Brazil, but we don't really see a lot of other places is.

Andrew Dete: And so what we see in Brazil that we don't really see in a lot of other places is banks and capital markets that are willing to support these long-term PPAs that are won in government auctions. We have significant financing support from the Brazil Development Bank, which is called BNDS, where we financed our Selba Power Project. And what this allows us to do is continue to participate in these auctions, and build up our portfolio, which today is 2.2 gigawatts. We think that's going to be 4 gigawatts or 5 gigawatts this year. And we're able to finance a majority of the project CapEx with really competitive asset-level debt. On the right, we just put in a couple of stats to compare to the US, and it's the same sort of thing we've been saying about demand. So Brazil is one-fifth of the energy used per capita in the US and has a population growth rate that's about five times that.

Andrew: Banks and capital markets that are willing to support these long duration ppas that are one and the government auctions, we have significant financing support from the Brazil development Bank, which is called B N D. S were refinanced or sell but power project.

Andrew: And what this allows us to do is continue.

Andrew: Continue to participate in these auctions buildup our portfolio, which today is 2.2 Gigawatts. We think that's going to four gigawatts are five gigawatts in it this year.

Andrew: And we're able to finance the majority of the project cap Capex would really competitive asset level debt.

Andrew: On the right. We just we just spent a couple of stats to compare to the U S and it's the same sort of thing we've been saying about the demand. So about one Brazil's one fifth of the energy usage per capita in the U S.

Andrew: And has the population growth that's about five times.

Andrew: Flipping to page 17, just to talk a little bit more about the grid and trying to underlying our opportunity here. So on the left side you can see what I mentioned is 60% hydro in the grid. That's the real thing to understand about Brazil, when it rains, that's very low cost power and low emission power.

Andrew Dete: Flipping to page 17, just to talk a little bit more about the grid and try to underline our opportunity here. So on the left side, you can see what I mentioned is 60% hydro in the grid, and that's the real thing to understand about Brazil. When it rains, that's very low cost power and low emissions power, and these are amazing projects. They've also done a great job of building out renewables, so 15% renewables on the grid. However, what that means is 75% of the grid is either seasonal in the case of hydro or intermittent in the case of renewables. And so, what Brazil has been very focused on, to their credit, is building out thermal power capacity, which is dispatchable and basically provides the firming capacity for that entire grid, which allows the hydro and the renewables to grow even more. On the right side is the problem that they've had.

Andrew: And these are amazing projects.

Andrew: They did a great job of building out renewables, so 15% renewables on the grid. However, what that means is 75% of the greatest either seasonal in the case of hydro or intermittent renewables and so with what Brazil has been very focused on to their credit is building out thermal power capacity, which is basketball and basically provides the firming capacity for that entire grid, which allows.

Andrew: The hydro and renewables to grow even more.

Andrew: On the right side is the problem that they've had so what would that what that means is with all these intermittent sources you've had a very volatile energy price and so we've grass out here you can see the inverse correlation between basically hydro storage in the spot price.

Andrew Dete: So what that means is that with all these intermittent sources, you have a very volatile energy price. And so we've graphed that here. You can see the inverse correlation between basically hydro storage and the spot price. Brazil thinks a lot about this problem and has done many things. The one thing that's difficult is just how fast they've grown. And so one of the things to know is that when these hydro plants were first built, the reservoirs were capable of storing enough energy that would last Brazil for many years. Today, that storage lasts about 30 days.

Andrew: <unk>.

Andrew: Brazil thinks a lot about this problem has done many things that the one thing that has been difficult. It's just how fast they've grown and so one of the things to know is that when when these hydro plants were first built the reservoirs, we're capable of storing enough energy that would last Brazil for many years today that storage last about 30 days and so.

Andrew Dete: And so it's been very hard to keep up with the capacity for growth in Brazil. Flipping, one of the things that really underlines the opportunity in Brazil is that there isn't enough gas. So there is a gas economy in Brazil today, there's a lot of industrial gas use, but there's not enough gas to go around for both the industrial use and for this thermal power capacity. And so the reason, as they've tried to build this out, that it's been hard to continue to build up the firm capacity is that you haven't had enough gas to do it. Hence the great opportunity for LNG development. NFE has identified this opportunity in two very distinct and focused ways. On the left side, what we're trying to underline is our regional strategy.

Andrew: It's been very hard to keep up with the capacity for growth in Brazil.

Andrew: Flipping now to 18.

Andrew: One of the things related underlying the opportunity in Brazil is.

Andrew: There isn't enough gas. So there is there is a gas economy in Brazil today, there's a lot of industrial gas use but theres not enough gas to go around for both the industrial use and for this thermal power capacity and so the reason as they've tried to build this out that it's been hard to continue to build up the firm capacity that you haven't had enough gas to do it hence the great opportunity for LNG development.

Andrew: And if he has has identified this opportunity in two very distinct and focused weighs on the left side, what we're trying to underline as our regional strategy, So where we see regional gas supply constraints amidst increasing demand is a perfect place for LNG, which we've targeted with our acquisition of Golar LNG in 2021.

Andrew Dete: So where we see regional gas supply constraints amidst increasing demand is a perfect place for LNG, which we've targeted with our acquisition of GOLAR LNG in 2021. On the other hand, the Buccarina Terminal exists very far from any pipeline or onshore gas and is the only gas import point in the region, which is a highly industrialized region where most of the exports for agricultural and mining resources go out of Brazil.

Andrew: At the top the Buck rain a terminal exists.

Andrew: <unk> very far from any pipeline, our onshore gas and is the only gas import point in the region, which is a highly industrialized region, where most of the exports on for agricultural and mining resources go out of Brazil.

Andrew Dete: Buccarina will be a 2.2 gigawatt power complex, 30 TBQ, 15-year contract, and then it will become the regional hub for all the LNG demand. So we'll continue to develop power in neighboring states. There are other regional industrial offtakers that we're targeting, and we're the main import point now that we've started for LNG in the region. And then what we really want to highlight is the opportunity at the Santa Caterina terminal. So the great thing to know about Santa Caterina is that through our pipeline connection. We are connected to over three and a half gigawatts of existing power plants that do not have firm gas supply or PPAs. Those plants obviously all want to win PPAs and do that.

Andrew: <unk> will be a 2.2 gigawatt.

Andrew: Power complex 30, TVT, a 15 year contract and then it will become the regional hub for all the LNG demand. So we'll continue to develop power in neighboring states. There are other regional industrial off takers that we're targeting and where the main import point now that we started for LNG in the region.

And then when we really want to highlight is the opportunity of the Santa Catarina terminal. So so the great thing about Santa Catarina is is through our pipeline connection we are connected over three and a half gigawatts of existing power plants that do not have firm gas supply or ppas.

Andrew: Those plans, obviously I'll want to wind ppas and do that they're going to need firm gas supply and we hope to be the supplier.

Andrew Dete: They're going to need firm gas supply, and we hope to be the supplier. Also, there's 300 TBTUs of industrial demand today in that pipeline system. Those folks pay a tariff all in that's greater than $18 per MMBTU when including taxes and transport fees. We can be very competitive against that.

Andrew: So theres 300 T V to use of industrial demand today in that pipeline system those folks pay a tariff all in that's greater than $18 per M btu, when including taxes and transport fees, we can be very competitive against that and so as we start our journey now in Santa Catarina. Those are the two opportunities to watch and we have exciting things on the horizon.

Andrew Dete: And so as we start our journey now in Santa Caterina, those are the two opportunities to watch. And we have exciting things on the horizon. On the right side is the second opportunity we want to highlight, which is the power auctions that are coming this year. Brazil forecasts the need for 20 gigawatts of new dispatchable power by 2032. The light blue here is the retirement of existing thermal power, and the dark blue bars are the Brazilian government estimates for the capacity need going out to 2032.

Andrew: On the right side is the second opportunity going to highlight which is the power auctions that are coming this year, So Brazil forecast the need for 20 Gigawatts of new dispatch will power by 2032.

Andrew: The light Blue here is the retirement of existing thermal power and the dark blue bars are the Brazil government estimates for the capacity need going out to 2032, we expect that it would be an auction.

Andrew Dete: We expect there to be an auction of 8 gigawatts or more this summer to start kind of chipping away at this. And as we're highlighting in our two terminals, we expect to be a bidder in that auction, both as a developer of new power and as a supplier of firm gas. Page 19 highlights our current business.

Andrew: Eight gigawatts or more this summer to start kind of chipping away at this and as we're highlighting in our two terminals, we expect to be a bidder in that auction both as a developer of new power added supplier firm gas.

Page 19 highlights our current business. So on the left side, we just wanted to walk through the current contracts that we have they're going to turn on over the next two years. So we have a 30 T V do contract turning on now with Norsk Hydro that'll go for 15 years in 2025, we'll see O D to 630 megawatt solar power plant that has it.

Andrew Dete: So on the left side, we just wanted to walk through the current contracts that we have; they're going to turn on over the next two years. So we have a 30 TBD contract turning on now with Norse Hydro that'll go for 15 years. In 2025, we'll COD the 630 megawatt Selba power plant that has a 25 year PPA. And then in 2026, we will COD our 1.6 gigawatt PPA, which is a 15 year contract. That gives us at Bacarena 30 TBQs of gas supply, 2.2 gigawatts of power, and an 18 year average contract duration. That all equates to 500 million in contracted EBITDA once we're fully running rate on these contracts in 2027. On the right side is the near-term growth I just went through. So there's a great need for new power capacity with a sophisticated mechanism to acquire it and local capital markets that are super supportive. Then we have the regional constraints on fuel supply. In Santa Catarina, most of that gas comes from Bolivian supply, which is declining.

Andrew: 25 year PPA.

And then in 2026, we will see O D. R 1.6, gigawatt, PPA, which is a 15 year contract that gives us at Buck Arena 30 T V to use of gas supply to 0.2 Gigawatts of tower and an 18 year average contract duration that all equates to $500 million in contracted EBITDA. Once we're fully run rate on these contracts in 2027.

Speaker Change: Got it.

Speaker Change: On the right side is the near term growth I just went through so there's a great need for new power capacity with a sophisticated mechanism to acquire it and local capital markets that are Super supportive then we had the regional constraints on fuel supply in Santa Catarina.

Speaker Change: Most of that gas comes from Bolivia, and supply, which is declining and embark arena, where the only importer.

Andrew Dete: And in Bacarena, we're the only importer. I also want to go through on page 20 just some quick highlights on the acquisition we announced on December 23rd and how that plays into our overall Brazil strategy. So what we're doing here is we're acquiring a power contract that was won in one of these Brazil auctions in 2021. It's a 1.6 gigawatt simple cycle contract for 15 years and pays a capacity payment of $280 million, and when called on to generate energy, has a gas price of approximately 120% of JKM. Why is this such a great opportunity for NFE? The first is that it leverages our existing infrastructure. So we were able to find a developer who had won this contract but was unable to complete gas supply. We saw a great opportunity to move the contract to our existing terminal and leverage our existing gas supply. It's really, really hard to supply 1.6 gigawatts of power on a demand basis if you don't already have gas flowing through the terminal.

Speaker Change: I also want to want to go through on page 20, just some quick highlights on the acquisition, we announced on December 23rd.

Speaker Change: And how that plays into our overall, Brazil strategy. So so what we're doing here is we're acquiring.

Speaker Change: Our power contract that was won and one of these Brazil auctions in 2021, it's at 1.6 gigawatt simple cycle contract for 15 years and pays a capacity payment of $280 million and when called on to generate energy has a gas price of approximately 120% of J P. M.

Speaker Change: Why is this such a great opportunity to earn a fee. The first is that it leverages our existing infrastructure. So we were able to find it a developer who had won this contract but wasn't able to complete gas supply we.

Speaker Change: We saw great opportunity to move the contract to our existing terminal and leverage our existing gas supply, it's really really hard to supply 1.6 gigawatts of power on a response basis. If you don't already have gas flowing through the terminal. Because then if he has these baseload contracts in this case with Norsk Hydro, we're able to leverage that and also supply.

Andrew Dete: Because NFE has these baseload contracts, in this case with Norse Hydro, we're able to leverage that and also supply spot respond demand contracts like this for power capacity. And so it really shows kind of how the whole terminal works together to support a complex of both industrial gas supply and over 2.2 gigawatts of power. So the third piece is just to demonstrate our significant operational leverage. So when we add this contract to Park Arena, we already have the two contracts in place, the 30 TBTUs of gas and the 630 megawatts of power. So we're already paying for all of our expenses, including the FSRU and terminal expenses. And now, what we'll make from this contract really drops straight to the bottom line at Park Arena. So, really an exciting opportunity for us. We're working very collaboratively with the regulatory bodies in Brazil. We've made great progress here and expect to have regulatory sign-off to transfer this PPA to Park Arena in March. Thank you, and I'll turn it to Chris. Thanks, Andrew. Good morning, everybody.

Speaker Change: Hi.

Speaker Change: Spot respond demands contracts like this for power capacity.

So really shows kind of how the whole terminal works together to support a complex of both industrial gas supply and over 2.2 Gigawatts of power.

Speaker Change: So the third piece is just to demonstrate our significant operational leverage so when we add this country Buck arena.

Christopher S. Guinta: Let's flip to slide 22 and talk through our FLNG project. Over the last three years, we've assembled an amazing team of employees, contractors, and construction partners that have been working around the clock to make our first FLNG unit a reality. The headline is that we're in the final stages of commissioning and expect our first LNG in late March and our first cargo to be sold in April, on which I'll go into more detail shortly. But before I do, I want to share just a brief background of how we got to this point.

Christopher S. Guinta: As most of you listening are well aware, the LNG production market is dominated by supermajors and national oil companies or by project-focused entities that require 20-year offtake agreements with investment grade counterparties. At NFV, however, we have stood in the gap and built critical energy infrastructure in emerging markets that need access to LNG now. So in late 2020 and early 2021, we were seeking to add to our LNG supply portfolio and found it difficult to get the quantity and the duration that we required for two primary reasons. First, there was a lack of overall supply in the market for the midterm period, notably 2024 through 2027, given that all the then currently operating liquefaction projects were nearly 100 percent contracted. And second, as we were only a single B-rated entity at the time, the credit support and project finance nature of the operating projects did not allow them to sell substantial quantities to NFV. So move to slide 23.

Speaker Change: At N. A V. Whoever we have stood in the gap and build critical energy infrastructure in emerging markets that need access to LNG now. So I'm 820, 20th and early 2021, we were seeking to add to our LNG supply portfolio and found it difficult to get the quantity and the duration that were required for two primary reasons <unk>.

Speaker Change: First a lack of overall supply in the market for the mid term period, notably 2024 through 2027, given given that all the van currently operating liquefaction projects were nearly 100 per cent contracted and second as we were only a single be rated entity at the time the credit support in project finance nature of the operating projects did not allow for them to sell.

Speaker Change: Angela quantities to N a fee.

Speaker Change: So we've decided twenty-three and let's talk about what we did is response as I've mentioned on this call before west scheduled a daily call every weekday morning for the last three years, where we aim to complete a solution that would be quick to market and allow us to serve the growing needs of our downstream customers first.

Christopher S. Guinta: And let's talk about what we did as a response. As I've mentioned on this call before, Wes scheduled a daily call every weekday morning for the last three years, where we aim to complete a solution that would be quick to market and allow us to serve the growing needs of our downstream customers. First, we sought to eliminate design slack that would require significant engineering contingencies and immediately went to work building the modules for gas treatment, liquefaction, and power.

Speaker Change: First we sought to eliminate design slack that would require significant engineering contingencies and immediately went to work building the modules for gas treatment liquefaction in power.

Christopher S. Guinta: We executed on long-lead procurement in order to focus on speed to market, excuse me, with industry leading OEMs like Chart, Baker Hughes. We purchased Jacob Riggs to serve as the foundation for the modules, eliminating the long and difficult process of constructing purpose-built marine assets like ships or barges that have been done for other offshore liquefaction solutions. And, of course, we chose top-flight engineering and construction partners in Fluor, Kiewit, Arendelle, Sentec, and others to ensure excellent workmanship. So where did that get us?

Speaker Change: We executed on long lead procurement in order to focus on speed to market <unk> excuse me with industry, leading Oem's chart Baker Hughes and Siemens, we purchased Jakob rigs to serve as a foundation for the modules, eliminating the long and difficult process of constructing purpose built marine assets like ships or barges that had been done for other offshore liquefaction.

Speaker Change: <unk> solutions and of course, we chose top flight engineering, and construction partners and Fluor, <unk>, <unk>, <unk> and others to ensure excellent workmanship.

Speaker Change: So where did that get US, we'll move decided 24 and you can see a recent photo of the F. LNG unit on location.

Christopher S. Guinta: We'll move to slide 24, and you can see a recent photo of the FLNG unit on location. With respect to our first FLNG unit, we declared FID in March of 2021. And we will have the first LNG in March of 2024, making this the fastest large-scale LNG project ever developed. We've completed over 8 million man hours of construction to date. We've transported rigs to their location in Altamira, completed the hot tap, and introduced feed gas for commissioning. And we have our LNG storage vessel, the NFV Peglin, securely moored and connected to the rigs awaiting LNG loading. Finally, the commissioning and operating teams are aggressively working to produce the first LMG, which is scheduled for late March, followed by the first cargo sailing in April. I'm moving to slide 25.

Speaker Change: With respect to our first F. O G unit, we declared F. I D. In March of 2021, and we love first LNG in March of 2024, making this the fastest large scale LNG project ever developed we've completed over 8 million man hours of construction today, we've transported rigs to their location in north Amir completed the hot tap and introduced feed gas for commissioning.

Speaker Change: And we have our LNG storage vessel, the Nfu's heglund securely moored and connected to the rigs awaiting LNG loading.

Speaker Change: Finally, the commissioning and operating teams are aggressively working to produce first LNG, which is scheduled for late March followed by the first cargo sailing in April.

Speaker Change: I'm moving to slide 25, and now that we're nearing the conclusion of commissioning for our first F. LNG unit, we're turning our attention to F. L. N G. Two which is a much cheaper and faster deployment timeframe given its onshore nature Christine pads site existing infrastructure and knowledge gained from F. LNG won.

Christopher S. Guinta: And now that we're nearing the conclusion of commissioning for our first FLNG unit, we're turning our attention to FLNG2, which has a much cheaper and faster deployment timeframe, given its onshore nature, pristine pad site, existing infrastructure, and knowledge gained from FLNG1. The modules are under construction now and will be completed in Q3 2025, and they will then ship to Mexico for installation at the Altamira terminal with expected completion in Q The terminal was built by Shell and is in excellent operational condition.

Speaker Change: The modules are under construction now and will be completed in Q3 2025, and will then shipped to Mexico for installation at the Ultimate terminal would expect to completion in Q1 2026.

Speaker Change: The terminal was built by shell and is an excellent operational condition. There's LNG in the tanks full deep water marine birthing capabilities and ample land to receive the modules quite frankly, you could not ask for a better location F.

Christopher S. Guinta: There is LNG in the tanks, full deepwater marine berthing capabilities, and ample land to receive the modules. Quite frankly, you could not ask for a better location. FLNG2 uses the exact same technology and design as FLNG1, but a completely different contracting strategy, one that allows us for much more certainty around price and schedule. We have a fixed price, date certain contract for our modules and a fixed price, date certain contract with our civil contractor for the onshore installation. We have 90% of the procurement already completed.

Speaker Change: F O N G. Two uses the exact same technology and design is F. One G. One, but a completely different contracting strategy. One that allows us for much more certainty around price and schedule. We have a fixed price date certain contract for modules in a fixed price date certain contract with our civil contractor for the onshore installation, we have 90% of the procurement already completed and and.

Christopher S. Guinta: And in many cases, the equipment is on location in the Kiewit yard or ready to ship from the original equipment manufacturer. And finally, as Wes mentioned, we're excited to announce that we have secured committed financing for a $700 million loan for FLNG2. To date, we have invested a little more than $300 million already, and the balance will be funded by the $700 million construction term loan. Quickly, on slide 26, we wanted to remind investors that LNG produced from our fast LNG units will go to supply our customers through our downstream terminals. With FLNG-1 nearly operational and FLNG-2 expected to be completed in early 2026, we will have approximately 140 TBTUs of production. The match of our own supply and demand provides significant operating advantages as well as insulates us from changes in global LNG prices.

Speaker Change: Many cases the equipment is on location in the queue at yard we're ready to ship from the original equipment manufacturer.

Speaker Change: And finally as West mentioned, we're excited to announce that we have secured committed financing for 700 million dollar loan breath on G. Two to date, we have invested a little more than $300 million already in the balance will be funded by the 700 million dollar construction term loan.

Speaker Change: Quickly on slide 26, we wanted to remind investors that LNG produced from our fast LNG units will go to supply our customers through our downstream terminals would that phones, you won nearly operational and F. O N. G. Two expected to be completed in early twenties 26, we will have approximately 140 G b to use and production.

Speaker Change: The match of our own supply and demand provides significant operating advantages as well as insulates us from changes in global LNG prices and importantly are expected volumes in F. T. A countries like Mexico, and Nicaragua, as well as Puerto Rico or more than the supply coming online from <unk> you wanted to thus removing any concerns over the non free trade agreement export permit.

Speaker Change: Pause recently announced.

Speaker Change: [noise]. So now please turn to slide 28, and I'm Gonna run quickly through the financial performance for the fourth quarter and the full year 2023.

Christopher S. Guinta: And importantly, our expected volumes in FTA countries like Mexico and Nicaragua, as well as Puerto Rico, are more than the supply coming online from FLNG 1 and 2, thus removing any concerns over the non-free trade agreement export permit pause recently announced. Now, please turn to slide 28, and I'm going to run quickly through the financial performance for the fourth quarter and the full year 2023. Just as was the case in Q3, we had no open market cargo sales and record earnings from our downstream terminal.

Speaker Change: Just as was the case in Q3, we had no open market cargo sales and record earnings from our downstream terminals total segment operating margin was $427 million with 372 million of that coming from volumes that we sold through our terminals to our customers. This $372 million nearly double the hundred and 95, we produce in Q3 <unk>.

Speaker Change: 2023 and for the full year of 2023, we produced nearly 1.3 billion in total adjusted EBITDA, which is up 20% from 2022.

Speaker Change: Net income for the quarter was $217 million or one dollar and six cents per share on a diluted basis and $548 million per year or $2.65 per share. We've also included funds from operations on this page, which is west which west described earlier, we had $1.36 per share in the fourth quarter and $3.56 per share for fiscal year 2023.

Christopher S. Guinta: Total segment operating margin was $427 million, with $372 million of that coming from volumes that we sold through our terminals to our customers. This $372 million is nearly double the $195 million we produced in Q3 2022, and for the full year 2023, we produced nearly $1.3 billion in total adjusted EBITDA, which is up 20% from 2022. Net income for the quarter was $217 million, or $1.06 per share on a diluted basis, and $548 million per year, or $2.65 per share.

Speaker Change: <unk> the punch line here is not only the magnitude of earnings but the quality as well in the second half of 2000 2300 per cent of our earnings came from sales to downstream customers or vessel charters and now with very little equity Capex required there should be meaningful cash flows produced each year.

Speaker Change: Finally turn to slide 29, and on the left side of the plate page, we're including a table showing the expected funds from operations for 2024 is around 1.25 billion less the $250 million of net Capex that was discussed earlier, which is around $1 billion that can be used to pay down debt.

Christopher S. Guinta: We've also included funds from operations on this page, which Wes described earlier. We had $1.36 per share in the fourth quarter and $3.56 per share for fiscal year 2023. The punchline here is not only the magnitude of earnings but the quality as well. In the second half of 2023, 100% of our earnings came from sales to downstream customers or vessel charters. And now, with very little equity CAPEX required, there should be meaningful cash flows produced each year. Finally, turn to slide 29, and on the left side of the page, we're including a table showing the expected funds from operations for 2024 are around $1.25 billion, less than $250 million of net capex that was discussed earlier, which is around $1 billion that can be used to pay down debt.

Speaker Change: To that end, we are evaluating potential refinancing opportunities to address or dermatitis in the ordinary course, including the six and three quarters notes do 2025, and we will continue to actively monitor market conditions as part of our process of refinancing and deleveraging goals, we're working with the ratings agencies on six key focus items for 2024, one debt reduction.

Speaker Change: Driven by free cash flow and asset sales to growth initiatives to be funded by acid level that three adding to our power portfolio with over two gigawatts of power in Brazil for increasing volumes and executing longterm fuel switching in Puerto Rico five commercial operations in F. L. N G. One in construction of F. L. G. Two six affirming or.

Speaker Change: Dividend policy of 10 cents per share per quarter.

Speaker Change: With that I'll pause turn the call back over to chance for Q&A.

Christopher S. Guinta: To that end, we are evaluating potential refinancing opportunities to address our debt maturities in the ordinary course, including the six and three-quarter notes due 2025, and we will continue to actively monitor market conditions. As part of our refinancing and deleveraging goals, we are working with the ratings agencies on six key focus items for 2024. One is debt reduction driven by free cash flow and asset sales.

Speaker Change: Thank you Chris Operator, Lisa would you. Please take a moment to receive some questions and wants to open up the lines.

Speaker Change: Thank you Sir if you would like to ask a question. Please signal pressing star one on your telephone keypad, if you're using a speaker phone. Please make sure can mute function is turned off to allow your signal to reach our equipment and again press star one to ask a question.

Speaker Change: Our first question comes from.

Christopher S. Guinta: Two, growth initiatives to be funded by asset-level debt. Three, adding to our power portfolio with over two gigawatts of power in Brazil. Four, increasing volumes and executing long-term fuel switching in Puerto Rico. Five, commercial operations on FLNG1 and construction of FLNG2.

Speaker Change: Chris Robertson with Deutsche Bank. Please go ahead, Sir your line of heart problem.

Christopher Robertson: Hey, good morning website, guys. Congrats on the strong quarter over quarter performance here, what's just given the step change.

Christopher Robertson: In adjusted EBITDA that we've seen over the last two quarters, it's obvious that the the Puerto Rico power generation contracts provide.

Christopher Robertson: Quite a meaningful uplift here, there's been some public filings and report around <unk> wanting to wind down its involvement as early as mid March can you just speak broadly to what's happening.

Christopher S. Guinta: And six, affirming our dividend policy of $0.10 per share per quarter. With that, I'll pause and turn the call back over to Chance for Q&A. Thank you, Chris.

Christopher Robertson: With regards to the theme of kind of what this means for the current contracts any potential sources of income in cash related to those assets and more importantly, what's the longer term growth opportunity in Puerto Rico on the fuel switching sides.

Chance Pipitone: Operator Lisa, would you please take a moment to receive some questions and let's open up the line? Thank you, sir. If you would like to ask a question, please signal by pressing star 1 on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment.

Christopher Robertson: Yeah, that's a great question and I'll turn it over to Brian to answer I mean, there there's actually been a fair amount of public statements. Both with regards to the the power plants as well as gas contract and and whatnot and so they have granted addressing this is that it's a great question is something we feel great about that yep Yep. Thank you wish you a great question.

Christopher Robertson: And again, press star 1 to ask a question. Our first question comes from... Chris Robertson with Deutsche Bank. Please go ahead, sir. Hey, good morning, Wes.

Christopher Robertson: Hey, guys, congrats on the strong quarter of a quarter performance here. Wes, just given the step change in the adjusted e-mail that we've seen over the last two quarters, it's obvious that the Puerto Rico power generation contracts provide quite a meaningful uplift here. There have been some public filings and reports around FEMA wanting to wind down its involvement as early as mid-March. Can you just speak broadly about what's happening? With regard to FEMA, what does this mean for the current contracts, any potential sources of income and cash related to those assets? And more importantly, what's the longer-term growth opportunity in Puerto Rico on the fuel switching side? Yeah, that's a great question. I'm going to turn it over to Brannen to answer it.

Brian: I think it's I think it's best to kind of start with the facts. We have in place now two two year contracts that we're about halfway through those.

Brian: Those kind of in the aggregate support 350 megawatts of operational power, but 425 megawatts of installed power. The good news is if you look at the statements side of the Puerto Rican government, including the Governor there there's been an agreement between the Governor Puerto Rico and <unk> to have these units remain in for the Governor.

Brian: Puerto Rico to purchase them. So there's a process ongoing it's public to have those units transfer from an a fee to the government of Puerto Rico I think most importantly, which is if you look at the system dynamics that 350 megawatts that will go into that will become 425 megawatts represents almost 15% to 20% of the installed power Bay.

Wesley Robert Edens: I mean, there's actually been a fair number of public statements, both with regard to the power plants, as well as the gas contract and whatnot. And so, let me have Brannen address it, but this is a great question. It's something we feel great about. Go ahead. Yeah, thank you, Wes.

Brian: <unk> and without it Puerto Rico couldn't achieve their reserve margin. So if you look at the criticality of the infrastructure. It has now become essential in terms of future. There's about one gigawatt, a potential conversion fuel switch or supplemental power opportunity because if you look at the way the Puerto Rico grid is evolving essentially what's.

Brannen McElmurray: Great question. I think it's best to kind of start with the facts. We have in place now two two-year contracts that we're about halfway through. Those kind of support 350 megawatts of operational power but 425 megawatts of installed power. The good news is, if you look at the statements side of the Puerto Rican government, including the governor there, there's been an agreement between the governor of Puerto Rico and FEMA to have these units remain and for the governor of Puerto Rico to purchase them. So, there's a process ongoing. It's public to have those units transferred from NFE to the government of Puerto Rico. I think most importantly, which is, if you look at the system dynamics, that 350 megawatts that will go into – that will become 425 megawatts represents almost 15 to 20 percent of the installed power base. And without it, Puerto Rico couldn't achieve its reserve margin.

Brian: <unk> is the H F O and diesel plants are gonna run off and in its place it's effectively gonna be gas from a thermal perspective, and then that over time will provide ancillary services as the grid continues to transition to renewable so from a <unk> perspective, our strategy is megawatts now answer.

Brian: <unk> services later, but under all scenarios the power that we're providing supporting and then ultimately fueling we expect to be there for the indefinite future.

Speaker Change: That's helpful. Brandon can I, just ask a follow up.

Brandon: I'll go ahead, and just to follow up on that in terms of the conversion opportunity I'm not on the Gigawatts of power that you mentioned, how many plans is that spread across what type of timeline would that be in terms of just the conversion opportunity like how long does it take to switch from diesel nature faux over to natural gas.

Speaker Change: Mhm, so it's three to four depending on what you want to sort of consider the current state of affairs and I think you know like you know all good you know development plans there are near and medium term opportunities. The fortunate fact is there happened to be a few opportunities that are gas ready today and so they simply need a few.

Brannen McElmurray: So, if you look at the criticality of the infrastructure, it has now become essential. In terms of the future, there's about one gigawatt of potential conversion, fuel switch, or supplemental power opportunity. Because if you look at the way the Puerto Rico grid is evolving, essentially, what's happening is the HFO and diesel plants are going to run out, and in their place, it's effectively going to be gas from a thermal perspective

Speaker Change: <unk> solution, which we think is in process than their medium term opportunities that can last anywhere from nine to 12 months in terms of converting existing plan to be gas ready not dissimilar to the project we've already executed in San one five and six because if you recall there there's a C C. G T that we.

Brannen McElmurray: And then that, over time, will provide ancillary services as the grid continues to transition to renewables. So, from an NFE perspective, our strategy is megawatts now, ancillary services later. But under all scenarios, the power that we're providing, supporting, and then ultimately fueling, we expect to be there for the indefinite future. That's helpful, Brannen. Can I just ask a follow up?

Speaker Change: He converted the actual time for conversions pry four to five months.

Speaker Change: So it's actually a pretty rapid process and so these opportunities exist.

Speaker Change: Throughout the island.

Speaker Change: Yeah, that's helpful <unk>.

Brannen McElmurray: Oh, go ahead. Just a follow up on that in terms of the conversion opportunity on the gigawatt of power that you mentioned. How many plants is that spread across?

Speaker Change: Yeah, and just the the one thing I'd add to that is if you think of the if you think of the existing power plans for female that Ah Brandon has has put in place those provided a critical need during the short term period and the price reflects that because everything happened <unk> the fastest installation the hawk.

Brannen McElmurray: What type of timeline would that be in terms of just the conversion opportunity? Like how long does it take to switch from diesel and HFO over to natural gas? So, it's three to four, depending on what you want to sort of consider the current state of affairs. And I think, you know, like, all good development plans, there are near and medium-term opportunities. The fortunate fact is there happen to be a few opportunities that are gas-ready today, and so they simply need a fueling solution, which we think is in process. Then there are medium-term opportunities that can last anywhere from nine to 12 months in terms of converting an existing plant to be gas-ready, not dissimilar to the project we've already executed in San Juan 5 and 6, because, if you recall, there is a CCGT that The actual time for conversion is probably four to five months, so it's actually a pretty rapid process, and so these opportunities exist, you know, throughout the island.

Speaker Change: That in the history of the Army Corps, which is indeed, saying something the longer term plan is simply more gas for these for both this plan as well as others that will get converted for you know and perhaps you know a lower price than the emergency power, but on balance or guidance for people to be expected, Puerto Rico will both <unk>.

Speaker Change: <unk> is it currently performs for our system, we think they're significant growth potential for both this ancillary services and other initiatives are underway. So it's it's it's nothing but good news.

Speaker Change: Alright, Thanks twice I'll I'll turn it over I'm sure you have plenty of other questions coming.

Speaker Change: And our next question comes from Sam Michael Lind with Ralph Research. Please go ahead. Your line is open.

Wesley Robert Edens: Yeah, and just the one thing I'd add to that is if you think of the existing power plants for FEMA that Brannen has put in place, those provide a critical need during a short-term period, and the price reflects that because everything happened so fast, as Brannen said, it's the fastest installation in the history of the Army Corps, which is indeed saying something. The longer-term plan is simply more gas for both this plant as well as others that will get converted at perhaps a lower price than the emergency power, but on balance, our guidance for people is that we expect that Puerto Rico will continue to perform as it currently does for our system. We think that there's significant growth potential for both this and ancillary services and other initiatives that are underway, so it's nothing but good news. All right. Thanks, Wes. I'll turn it over to you.

Speaker Change: Morning, everybody heavy leap day, thanks for taking the question.

Follow up on Puerto Rico.

Speaker Change: Cause there are a lot of variables between you know a new price or a sort of a pro forma price and a new term and then upside to volumes and then you know whatever agreement you come to when it when or if it gets restrict but I think you know the most daily.

Speaker Change: Daily in question, we get from investors on the inbound side is you know is there any scenario, where the business model in Puerto Rico changes because of Ah FEMA negotiation and and re contracting but the balance sheet and the leverage ratios are are affected and you know basic.

Sam Margolin: I'm sure you have plenty of other questions. And our next question comes from Sam Margolin with Wolf Research. Please go ahead, your line is open. Good morning, everybody.

Speaker Change: Put another way like do you see this resolution as something that will ultimately be positive for your leverage ratios on a on a go forward basis.

Speaker Change: Yep. This is Brian and I'll I'll take that I mean, I think you know I kind of I'll I'll Echo a little bit where I started with the last question I think it's important if you look at what Puerto Rico itself is saying you know they are moving through a process, where they will acquire the 350 megawatts that we bill I think you know.

Sam Margolin: Happy Leap Day. Thanks for taking the time to answer the question. Follow up on Puerto Rico because there are a lot of variables between, you know, a new price or sort of a pro forma price and a new term and then upside to volumes and then, you know, whatever agreement you come to, when it when or if it gets restructured. But I think, you know, the most salient question we get from investors on the inbound side is, you know, is there any scenario where the business model in And, you know, basically, put another way, like, do you see this resolution as something that will ultimately be positive for your leverage ratio going forward? Yep, this is Brannen.

Speaker Change: From an expectation standpoint that transaction, we'll need to close in the near term and make those units permanent. So from you know mechanical standpoint, we will receive cash proceeds for that and you should expect that Chris and others will kind of use.

Speaker Change: That from a balance sheet perspective, you know in a way that makes sense consistent with their capital plan and strategy around the credit generally.

Wesley Robert Edens: I'll take that, I mean, I kind of, I'll echo a little bit where I started with the last question. I think it's important if you, you know, look at what Puerto Rico itself is saying. They are moving through a process where they will acquire the 350 megawatts that we built. I think, from an expectation standpoint, that transaction, you know, will need to close in the near term and make those units permanent. So, you know, from a mechanical standpoint, you know, we will receive cash proceeds for that. And you should expect that Chris and others will kind of use that from a balance sheet perspective, you know, in a way that makes sense consistent with their capital plan and strategy around credit generally. Okay. Yeah, I mean, I think that... Well, no, just to address...

Speaker Change: Okay, Yeah, Yeah I think.

Speaker Change: No just the address I mean also.

Speaker Change: We are halfway through a two year Tom of those contracts and so while I understand there is there is interest on People's part to understand what will happen to conclusion of that from our standpoint, we are a massive part of the energy solutions for Puerto Rico Brown in an era of the whole you know 800 people that work for us down there are busy there everyday and so.

Speaker Change: It's simply not possible to predict the future exactly other than the fact that we have the best information you see the the statements that I made publicly by both the federal government as well as the Governor, Puerto Rico and others about the nature of these assets and so we feel great about it I mean, that's that's the bottom line and I think that when you take.

Speaker Change: The sheer math a thousand megawatts of additional power that needs to be converted under any such situation. That's a that's a very positive outcome for us. We're the only material LNG terminal on the island and in in the area of San Juan where the bulk of the people in the bulk of the powers. So those are those are the facts and so I I understand the question you would.

Wesley Robert Edens: I mean, also, we are halfway through a two-year term on those contracts, and so while I understand there's an interest on people's part to understand what will happen at the conclusion of that, from our standpoint, we are a massive part of the energy solution for Puerto Rico. Brannen, Hanera, the whole 800 people that work for us down there are busy there every day. It's simply not possible to predict the future exactly, other than the fact that we have the best information.

Speaker Change: Like to be more spot, so I'd like to predict the future about a lot of different things, but but we feel you know very very good about it based on the public statements that are out there as well as our own in China's with respect to this this process as soon as you know there is there's for the resolution of that will be happy to share. It with you can't do more than that.

Wesley Robert Edens: You see the statements that are made publicly by both the federal government as well as the governor in Puerto Rico and others about the nature of these assets, and so we feel great about them, and that's the bottom line. And I think that when you take the sheer math of 1,000 megawatts of additional power that needs to be converted under any such situation, that's a very positive outcome for us. We're the only material LNG terminal on the island, in the area of San Juan, where the bulk of the people and the bulk of the power are. So those are the facts.

Speaker Change: I understood now that that's very clear and actually it's a good transition to a follow up I had to just about the overall competitive landscape, maybe not just in Puerto Rico, but in Brazil, too you have all this upside to volume and ultimately power demand and both of these markets and you know to date, you've done a really good job of kind of fencing off your domain and <unk>.

Speaker Change: <unk> your market share there and would just love to hear your thoughts about what the competitive landscape is there today and how you can kind of maintain your position on it uhm amplify a little bit of it Anderson cause I thought you did a terrific job of laying it out I mean, Brazil for US is that it's been out investments historically provide.

Wesley Robert Edens: And so I understand the question and would like to be more responsible; I'd like to predict the future about a lot of different things. But we feel, you know, very, very good about it based on the public statements that are out there, as well as our own insight with respect to this process. And as soon as, you know, there's further resolution to that, we'll be happy to share it, but we can't do more than that. Okay. No, that's very clear.

Speaker Change: 1 billion and a half dollars right. So we made a massive investment in the country.

Speaker Change: We now effectively not potentially effectively today, we have really two of the four operating input gas terminals and a massive country is it is a an enormous need for additional power I mean, the the way that actually the Brazilian government has managed their renewable portfolio I think as a role model for <unk>.

Wesley Robert Edens: And actually, it's a good transition to a follow-up question I had about the overall competitive landscape, maybe not just in Puerto Rico but in Brazil, too. You have all this upside to volume and, ultimately, power demand in both these markets. And, you know, to date, you've done a really good job of kind of fencing off your domain and protecting your market share there. And we just love to hear your thoughts about what the competitive landscape is there today and how you can kind of maintain your position. Yeah, you know. I'm going to amplify a little bit with Andrew because I thought he did a terrific job of laying it out.

Speaker Change: Other countries, including the United States, you should think about this going forward with they basically between the hydro electric power and the other renewable power something like 80 per cent of all the power and the country is renewable would that necessitates is a huge standby capacity to provide the peaks and valleys. If it doesn't rain or the sun doesn't shine the wind doesn't blow and so and what they had done going back to 2002.

Speaker Change: Sex is they have you know.

Speaker Change: Issued these capacity auctions for you know 35 billion or 30, 35, Gigawatts power whatever it is massive amounts of power. So there's a real history of them doing it and because it's such a large and vibrant country. They actually have a an internal capital markets that supports these activities finances them as well so it's a it's a remark.

Wesley Robert Edens: I mean, Brazil, for us, it's been an investment historically of about a billion and a half dollars, right? So we've made a massive investment in the country. We now effectively, not potentially, but effectively today, we have really two of the four operating gas terminals in a massive country. There is an enormous need for additional power. I mean, the way that the Brazilian government has managed their renewable portfolio is, I think, a real model for how other countries, including the United States, should think about this going forward. They basically, between hydroelectric power and other renewable power, it's something like 80% of all the power in the country is renewable. What that necessitates is a huge standby capacity to provide the peaks and valleys if it doesn't rain or the sun doesn't shine or the wind doesn't blow.

Speaker Change: Double combination of this and I feel like you know we've been clear with what we have in hand today, what is already contracted it generates between $500 million and run right EBITDA by the middle of 2026, I feel like our value from the advil, because because the cash flow contribution to the current year is nominal right. Because this is all stuff that is just now coming.

Speaker Change: <unk> I don't feel like that Guy is reflected in the valuation of our company at all but I think that'll change dramatically and we intend to house investors and counterparts and rating agencies, probably in the month of April down to there is a remarkable thing to see in person. When you see the effect of the D. Carbonization that it has on the Amazon one of the most environmentally sensitive parts of the entire plant.

Wesley Robert Edens: And so, and what they have done going back to 2006 is they have issued these capacity auctions for 35 billion or 35 gigawatts of power, whatever it is, massive amounts of power. So there's a real history of them doing it. And because it's such a large and vibrant country, they actually have an internal capital market that supports these activities and finances them as well. So it's a remarkable combination of these.

Speaker Change: <unk>, it's amazing and we are there yesterday with the energy Minister with it the governor of the state of Bra and you can see that this is not just a good project and your eyes as an essential project and something that is desperately needed across the country and our competitive advantage in the south in particular is we have a new gas terminal that <unk>.

Wesley Robert Edens: And I feel like we've been clear with what we have in hand today, what has already contracted, and it generates $500 million in run rate EBITDA by the middle of 2026. I feel like our value from that because the cash flow contribution in the current year is nominal, right? Because this is all stuff that is just now coming on.

Speaker Change: Opened yesterday, there's going to be auctions he'll be coming up we expect in the next handful of months. We are are the only provider perhaps are the major provider of gas, which gives us a massive competitive advantage and we'll try to detail that now that these are up and running and show you. So I think that that what what is crystal clear is that the.

Wesley Robert Edens: I don't feel like that value is reflected in the valuation of our company at all. But I think that'll change dramatically. We intend to host investors and counterparts and rating agencies probably in the month of April down there. It's a remarkable thing to see in person.

<unk> and I said, this and perhaps not not clear enough terms. The terminals themselves are the gateways that allow you to service your customers. They are also the gateways to prevent other people from competing with you and of course anybody can build a terminal. It's just it's just the money except it's also time and time is the only commodity that you can't buy the term.

Wesley Robert Edens: When you see the effect of decarbonization it has on the Amazon, one of the most environmentally sensitive parts of the entire planet, it's amazing. And we were there yesterday with the energy minister and with the governor of the state of Paraguay. And you can see that this is not just a good project in their eyes; it's an essential project and something that is desperately needed across the country. And our competitive advantage in the South, in particular, is that we have a new gas terminal that opened yesterday. There's going to be auctions that will be coming up, and we expect in the next handful of months that we will be the only provider, perhaps, or the major provider of gas, which gives us a massive competitive advantage.

Speaker Change: <unk> opened yesterday in Brazil, where should the developments doesn't were started about eight years ago.

Speaker Change: And so all you need to compete with us in Brazil right. Now is the time machine. If you can just go back eight years, you're gonna be right, there neck and neck with it. If you don't have the time machine now it's gonna be a pretty complicated thing to compete with so I couldn't speed is speak about it and more more clear terms and same thing applies for us in Puerto Rico. The same thing applies for us and Mexico. The same thing applies for some <unk>.

<unk> et cetera, all these things have characteristics of markets all have different characteristics, perhaps none of them as attractive on a long term basis as as Brazil and is Puerto Rico, but all of our our terminals are actually the same competitive position and that is something which I think is a.

Wesley Robert Edens: And we'll try to detail that now that these are up and running and show you. So I think that what is crystal clear is that the, and I said this perhaps not in clear enough terms, the terminals themselves are the gateways that allow you to serve your customers. They are also the gateways to prevent other people from competing with them. And of course, anybody can build a terminal, and it's just money, except it's also time, and time is the only commodity that you can't buy. The terminals that opened yesterday in Brazil, where the development of them started about eight years ago, so all you need to compete with us in Brazil right now is a time machine. If you can just go back eight years, you're going to be right there, neck and neck with us.

Speaker Change: Unbelievable sustainable competitive advantage.

Speaker Change: And what move to our next caller, but the question Craig here with three brothers. Please go ahead, Sir your line is open.

Craig: Morning, <unk>, thanks for taking the question.

Speaker Change:

Craig: So you've you've got this very retroactive hitting the contract that that's kind of a sugar rush, but you've got all these great opportunities with Puerto Rico fuel switching in Brazil too.

Craig: Dramatically fill in and go way beyond that with material downstream growth.

Craig: Let's put that requires upstream supply.

Craig: And at the moment I believe maybe an M. T. P. A of an S. P. A with venture global C. P to at least the timings in doubt and even with that all your contracting two F. LNG deployments within two or three years it could wind up.

Wesley Robert Edens: If you don't have that time machine, though, it's going to be a pretty complicated thing to compete with. So I couldn't speak about it in more clear terms. And the same thing applies for us in Puerto Rico. The same thing applies for us in Mexico. The same thing applies for us in Nicaragua, etc. All these things have characteristics.

Craig: <unk> net short LNG.

Craig: So my first question is more specifically how do you think about balancing sources and uses of LNG over the next two or three plus years and to the degree this becomes an issue.

Wesley Robert Edens: The markets all have different characteristics. Perhaps none of them is attractive on a long-term basis as Brazil and Puerto Rico. But all of our terminals are actually in the same competitive position. And that is something which I think is an unbelievable, sustainable competitive advantage. And we'll move to our next caller with the question, Craig Shere with Tui Brothers. Please go ahead, sir.

Craig: Wind up being a governor on the on the foot pedal of your downstream growth.

Speaker Change: Is a great question I think its history interesting to me because I think that you had the question that you pose as the opposite of what most People's concerns are though I mean, I think most of the world is now cause now concerned that since you're roughly doubling the supply of LNG in the world by the end of this decade. The question is where's the downstream gonna come to support that when you look at our book of business and we've been very transfer.

Craig Shere: Your line is open. Morning. Thanks for taking the question. So you've got this very attractive FEMA contract that's kind of a sugar rush, but you've got all these great opportunities with Puerto Rico fuel switching and Brazil to dramatically fill in and go way beyond that with material downstream growth. But that requires upstream supply.

Speaker Change: <unk> about it we are fully like contracted in terms of what we produce and what we actually then provide our customers over the next couple of years and so we feel obviously very good about that in addition, a longer term we can either simply continue to to to build more liquefy ours, if we choose to do that or more likely I think will look too.

Wesley Robert Edens: And at the moment, I believe maybe an MTPA of an SPA with Venture Global CP2, at least the timing's in doubt. And even with that, all your contracted 2F LNG deployments within two, three years, it could wind up being net short LNG. So, my first question is, more specifically, how do you think about balancing sources and uses of LNG over the next two to three plus years? And to the degree that this becomes an issue, do you see it lined up being a governor on the foot pedal of your downstream growth? It's a great question.

Speaker Change: <unk> the market to supply it I mean, there's you know there's a massive amount of supply in the later part of the decade or so of the other things that I am concerned about with respect to our business right now longterm supply of LNG is not anywhere on the list I just think it's there's there's many many different ways that that that issue can be addressed.

Wesley Robert Edens: I think it's very interesting because I think that the question that you pose is the opposite of what most people's concerns are. I mean, I think most of the world is now concerned that since you are roughly doubling the supply of LNG in the world by the end of this decade, the question is, where's the downstream going to come from to support that? When you look at our book of business, and we've been very transparent about it, we are fully contracted in terms of what we produce and what we actually then provide to our customers over the next couple of years. And so we feel, obviously, very good about that.

Speaker Change: In the short term, we've gone through a lot of investment and a lot of focus to get our own liquefier is up and running but the the rest of the short term to use in the kind of 24, 25, 26, 27 period, but beyond that I think that there's more likely to be an abundance of supply than than the not and I think frankly.

Speaker Change: The most scarce resource by far in the LNG ecosystem around the world will be downstream terminals like ourselves and they're really to my knowledge. There was nobody that has the same collection of downstream terminals that has so much excess capacity already up and operational they can service all our customers and therefore create a short for all these other.

Wesley Robert Edens: In addition, longer term, we can either simply continue to build more liquefiers if we choose to do that, or more likely, I think we'll look to the market to supply it. I mean, there's, you know, there's a massive amount of supply in the latter part of the decade. And so of the things that I am concerned about with respect to our business right now, the long-term supply of LNG is not anywhere on the list.

Speaker Change: Long long providers to come into so I think we couldn't be better position honestly and as a company based on where we are given that the kind of macro landscape as well.

Speaker Change: Great and last question an F LNG too.

Wesley Robert Edens: I just think it's, there are many, many different ways that that issue can be addressed in the short term. We've gone through a lot of investment and a lot of focus to get our own liquefiers up and running that address the short-term needs in the kind of 24, 25, 26, 27 period. But beyond that, I think that there's more likely to be an abundance of supply than not. And I think, frankly, the most scarce resource by far in the LNG ecosystem around the world will be downstream terminals like ourselves. And to my knowledge, there's nobody that has the same collection of downstream terminals that have so much excess capacity already up and operational that can service all our customers and, therefore, create a short for all these other long providers to come into. So I think we couldn't be better positioned, honestly, as a company, based on where we are, given the kind of macro landscape as well. And last question on FLNG2.

Speaker Change: Great that you have for firm contracting on that so we have a better sense of course, then delivery, but is is all Mexican contracting regulatory approvals has everything in place at this point, what what what is left in terms of hurdles to make this 100 per cent locked in.

Speaker Change: Yeah, I think we're following the same path that we did on F. O G. One Craig So you have the C. F V as your partner.

Speaker Change: The President is cabinet.

Speaker Change: Successor administration have all expressed strong desire for this contract or this project to move forward quickly I'll tell you that everything that we haven't we can apply for now has been applied for and everything's in the path of moving through approval. So again it with the with the government effectively as your partner here with massive financial incentive.

Speaker Change: Themselves for this project to get online again, we're using existing infrastructure that they're paying for and not really getting the benefit of now plus the profits in the in the project make this extremely attractive to them and we don't expect any challenges going forward, yeah, and I want to.

Wesley Robert Edens: Great that you have firm contracting on that so we have a better sense of cost and delivery. But is all, you know, Mexican contracting, regulatory approvals, is everything in place at this point? What is left in terms of hurdles to make this 100% locked in?

Speaker Change: Reiterate again, what I said earlier, which is the existing F. D. A approval. So we have the existing the ability for us to bring volumes to Puerto Rico with our downstream volumes mean that essentially we have a home for all of our own production right now which is a massive difference versus anybody else has got a new project, obviously, we expect that the the.

Wesley Robert Edens: Yeah, I think we're following the same path that we did on FLNG1, Craig. So you have the CFE as your partner, the president, his cabinet, and the successor administration have all expressed a strong desire for this project to move forward quickly. I'll tell you that everything that we can apply for now has been applied for, and everything is in the process of moving through approval. So again, with the government effectively as your partner here, with massive financial incentives for this project to get online, again, we're using existing infrastructure that they're paying for and not really getting the benefit of now, plus the profits in the project make this extremely attractive to them, and we don't expect any challenges going forward.

Speaker Change: Ban will not be a longterm Bam, we expect that it will be resolved at some point in time, but of course, we can't predict the future. So we don't know when it'll happen happily from our standpoint, we are the only company that doesn't care about that because we're actually in a great position by it as we are right now because of our our downstream in weather, whereas all located.

Speaker Change: And will move to our next color Sharif Amorality with B T. I G. Please go ahead your line is open.

Sharif Amorality: Good morning, Thanks for taking my questions. So first I guess you know a couple of questions. You know this is kind of asking have in a different way, but realizing the longterm goal of the integrated model is to supply your own LNG to your own terminals is there any reason why the company's still can take advantage of LNG price arbitrage, if they present themselves.

Wesley Robert Edens: Yeah. And I want to reiterate again what I said earlier, which is the existing FTA approvals that we have, and the existing ability for us to bring volumes to Puerto Rico with our downstream volumes means that essentially, we have a home for all of our own production right now, which is a massive difference versus anybody else who's got a new project. Obviously, we expect that this ban will not be a long-term ban.

Sharif Amorality: In the future.

Speaker Change: You know, we don't really view ourselves as the merchant business really we want to be in the business of full integration. So we integrate ourselves from liquefaction to transport two terminals to our gas and so we don't want to be in the merchant business. We don't Wanna have to predict that is part of our future and I think we very.

Wesley Robert Edens: We expect that it'll be resolved at some point in time, but, of course, we can't predict the future, so we don't know when it'll happen. Happily, from our standpoint, we are the only company that doesn't care about that because we're actually in a great position as we are right now because of our downstream and where it's all located. And we'll move to our next caller, Sherif Elmaghrabi with BTIG. Please go ahead. Your line is open. Hey, good morning.

Speaker Change: <unk> have have insulated ourselves from these price swings and again I'd point to look at the price decline for T T F or J Cam in the second half of the year look at the results of other companies that were exposed to that compare them to our results over the same period, you'll see the benefit of that we think that with us with this now focus and delivery of our.

Sherif Elmaghrabi: Thanks for taking my questions. So first, I guess, you know, a couple of questions ago, this is kind of asking half of that a different way, but realizing the long-term goal of the integrated model is to supply your own LNG to your own terminals. Is there any reason why the company still couldn't take advantage of LNG price arbitrage if it presented itself in the future? You know, we don't really view ourselves as a merchant business; really, we want to be in the business of full integration. So we integrate ourselves from liquefaction to transport to terminals to power or gas. And so we don't want to be in the merchant business; we don't want to have to predict that as part of our future.

Speaker Change: Operating results our goal is to both that'd be very predictable as a company and going forward and also to be a growing company as we continue to manage the upside in these different terminals in the end markets around the world. So that that clearly is the objective and I think that we are you have made great strides in getting there. So it was a bit of a process, but again the last two <unk>.

Speaker Change: Quarters. We think are you know two in a row in terms of actually doing what we said we were gonna do and so we feel really good about that so.

Speaker Change: Thanks, and then I want to get a better idea of these additional opportunities in Brazil do you have a sense of the turnaround time on that eight plus gigawatt power option. So how long after holding the auction our winters announced and do you have a sense how long after that we could see some more gas volumes pull through the Brazil terminal.

Wesley Robert Edens: And I think we've very successfully insulated ourselves from these price swings. And again, I'd point out that look at the price decline for TTF or JKM in the second half of the year, look at the results of other companies that work as opposed to that, compare them to our results over that same period, and you'll see the benefit of that. We think that with us now, and with this focus and delivery of our operating results, our goal is to both be very predictable as a company and going forward and also to be a growing company as we continue to, you know, manage the upside in these different terminals and markets around the world. So that clearly is the objective.

Speaker Change: Yeah, I'll I'll, let Andrew go through that maybe maybe spend one night and talk about how the options actually works I think it is quite interesting yeah. Yeah sure. Thanks for the question. So you know generally those options are decided the same day in in sorry, not generally they are decided the same data very transparent they're done an electronic platform you can see all the bids that happen. So so the way that we <unk>.

Sherif Elmaghrabi: And I think that we are, you have made great strides in getting there. So it's a bit of a process. But again, the last two quarters have been, you know, two in a row in terms of actually doing what we said we were going to do. And so we feel really good about that. Thanks, Wes.

Andrew: Affect this happen is is consistent with history, which is in the next you know maybe a couple of weeks.

Andrew: Four months, they all kind of announced the options there'll be a data associated with that would be some time. This summer there'll be a month for a kind of public consult on the auction rules and different things they'll take those new account and then they'll kind of set a firm date for the for the actual auction. So let's let's just assume for a second that's kind of June 30th right.

Wesley Robert Edens: And then I want to get a better idea of these additional opportunities in Brazil. Do you have a sense of the turnaround time on that A plus gigawatt power auction? So how long after holding the auction are winners announced? And do you have a sense of how long after that we could see some more gas volumes pulled through the Brazilian terminals? Yeah, I'm gonna let Andrew go through that.

Andrew: So on June 30th they'll run the bid electronic platform at the end of the day, you will know if you've won or not and and exactly what price now to answer. Your question is is when when will that actually come on line and do we think this is actually be an interesting option for that because there's probably gonna be too kind of some sense of what happens which would be existing jenner.

Andrew Dete: Maybe spend one minute talking about how the auctions actually work, because I think it's quite interesting. Yeah. Yeah, sure. Thanks for the question. So, you know, generally, those auctions are decided the same day. And sorry, not generally, they are decided the same day. They're very transparent.

Andrew: Nation, and new generation and and we don't know exactly you know how that it might be two options are one it may not matter, but but the important thing is the capacity you need is so great that we think for the existing generation, which gets a new contract there's going to be a desire for those just start immediately the way to work as well probably.

Andrew Dete: They're done on an electronic platform. You can see all the bids that are made. So the way that we expect this to happen is consistent with history, which is in the next, you know, maybe a couple weeks, a month, or a month, they'll kind of announce the auctions, there'll be a date associated with that, which will be sometime this summer, there'll be a month for kind of public consultation on the auction rules and different things. They'll take those into account. And then they'll kind of set a firm date for the actual auction. So let's just assume for a second that it's kind of June 30. Right. So on June 30, they'll run the bid electronic platform. At the end of the day, you will know if you've won or not and at exactly what price. Now, to answer your question, when will that actually come online?

Andrew: Be a three or four year time frame for a few days to actually start incentive for example, if you plant has an existing P. P. A you know you can still win this and then kind of contract out but for plants that are not contracted today you know the auction the government and the plants are all gonna Wanna start immediately so that's exciting and we think can lead to new volumes in 2024 and only 2025.

Andrew: And then there'll be the kind of typical auction for new generation, which which would be P. P. As starting in 2028 with an ability of you finished it was earlier to start earlier and so the simple cycle configuration of these options for capacity in Brazil is interesting right because that's a much more simple construction process.

Andrew Dete: And so we think this actually will be an interesting auction for that, because there's probably going to be two kinds of subsets of what happens, which would be existing generation and new generation. And we don't know exactly, you know, how that might be two auctions or one. It may not matter.

Andrew Dete: But the important thing is the capacity need is so great that we think for the existing generation, which gets a new contract, there's going to be a desire for those to start immediately. But the way it'll work is it'll probably be a three or four year time frame for the PPAs to actually start. And so, for example, if your plant has an existing PPA, you know, you can still win this and then kind of contract it out.

Andrew: So when we may be able to start sooner than that but obviously the the new generation is gonna take construction and it will be a little bit later.

Speaker Change: Oh, that's pretty interesting thanks, everyone.

Speaker Change: Yeah, I think that the the thing that just in terms of talking to this earth and when the team. There. This is so interesting is that when they announced the options there'll be a date on that date there'll be an electronic option that you'll be participating in live over the course of the day is you're making your own beds and you see how the market adjusting the ward and by the end of the day it will be awarded so it's new.

Andrew Dete: But for plants that are not contracted today, you know, the auction, the government, and the plants are all going to want to start immediately. So that's exciting. And we think it could lead to new volumes in 2024 and early 2025. Then there'll be the kind of typical auction for the new generation, which will be PPA starting in 2028, with the ability, if you finish those earlier, to start earlier. And so the simple cycle configuration of these auctions for capacity in Brazil is interesting, right because that's a much simpler construction process. And so we may be able to start sooner than that. But obviously, the new generation is going to take construction, and it will be a little bit later. That's pretty interesting. Thanks, everyone.

Speaker Change: Credibly transparent and buttoned up process again, I think you know the the manner in which the present government has approaches in the last 20 years is is very laudable I mean, it creates a clear path for people to <unk>, a clear path for the outcomes to be awarded this this nuance that Andrew was talking about which is will it be.

Speaker Change: With existing power plants, and perhaps don't have gas that a bit into it or is it new generation give us a very unique characteristic this and that it's an option for the future but in the future can be very soon if its existing generation and that's where you know there are again there are four effective terminals that are in Brazil. Two of them are are as one of them in the in the capital.

Speaker Change: Constrained south so we think the opportunities for US there are tremendous and I think you know.

Speaker Change: I'm not making this D. Brazil education on this call will again, we're gonna host investors rating agencies Counterparties, probably some time in April or May down and put her in Jamaica, <unk> and in Brazil, just do it to walk through this which I hope people will take advantage of it because we think this as a standalone opportunity is massive and so.

Ryan Levine: Yeah, I think that the thing that just in terms of talking this through with Andrew and the team there, it's so interesting is that when they announce the auctions, there will be a date. On that date, there will be an electronic auction that you'll be participating in live over the course of the day as you're making your own bids, and you see how the market adjusts in the award. And by the end of the day, the prizes will be awarded. So it's an incredibly transparent and buttoned-up process.

Speaker Change: I look forward to to spend more time that moment Andrew.

Speaker Change: And our next question comes from Brian Levine The city. Please go ahead, Sir if your line is open.

Ryan Levine: Again, I think the manner in which the Brazilian government has approached this in the last 20 years is very laudable. I mean, it creates a clear path for people to bid. It creates a clear path for outcomes to be awarded.

Ryan Levine: Thanks for taking my questions.

Ryan Levine: Two two questions one in terms of the ratepayer impacting their potential modernization of the Puerto Rican Powerplants, how do you see that impacting the Yankees sooner and the extent that there's any stepped down in P. P. A right.

Wesley Robert Edens: This nuance that Andrew was talking about, which is whether it will be with existing power plants that perhaps don't have gas that is bid into it, or is it new generation, gives a very unique characteristic to this in that it's an auction for the future, but the future could be very soon if it's existing generation. And that's where, you know, there are, again, there are four effective terminals that are in Brazil. Two of them are ours, one of them in the capital, you know, the constrained south. So we think the opportunities for us there are tremendous. And I think, you know, I'm not making this be a Brazil education on this call.

Ryan Levine: And repair.

Ryan Levine: And does that create more impetus for further investment in in in the location or a curious thing.

Speaker Change: Right Yep.

Speaker Change: Yep I could have just said will you know kind of start with something I think is off refrain you know the people in Puerto Rico, you know pay the most for power anywhere in the U S and they have the worst service. So that's kind of a starting point if you kind of look at the rate impact of the 350 megawatts that we just put in even in the short period of time, it's roughly two cents.

Wesley Robert Edens: Again, we're going to host investors, rating agencies, counterparties, probably sometime in April or May down in Jamaica or Brazil just to walk through this, which I hope people will take advantage of because we think this as a standalone opportunity is massive. And so I look forward to spending more time with Andrew. And our next question comes from Ryan Levine with Citi. Please go ahead, sir.

Speaker Change: Or about 10% off the retail rate so on a go forward basis, because what you're competing with his old technology. You know the average age of the plant there that burns diesel in each of those about 35 years. So you're talking about heat rates that are 12 or 13.

Speaker Change: Versus you know brand new technology today, which would be six six and a half so roughly twice as bad. So once you pair that off with the fact that the delivered cost of distillate fuel there is well in excess of what what anybody would really think because of both where they source it from but also the delivery charge.

Ryan Levine: Your line is open. Thanks for taking my questions. Two questions. One, in terms of the ratepayer impact of the potential monetization of the Puerto Rican power plants, how do you see that impacting the end consumer? And to the extent that there's any step down in PPA rates and ratepayer bills. Does that create more impetus for further investment in the location or yours? Go ahead, Ryan. Yep. I can address that. We'll, you know, kind of start with something I think is an often-refused topic: the people in Puerto Rico pay the most for power anywhere in the U.S., and they have the worst service.

Speaker Change: You have a lot of head room to compete with so for example, if you look at the price of diesel today, it's roughly about $22 and it may be to you and so anything less than $22 and maybe to you today as a win for the Puerto Rican repair. So there's a lot of headroom in those kind of numbers.

Brannen McElmurray: So, you know, that's kind of the starting point. If you kind of look at the rate impact of the 350 megawatts that we just put in, even for a short period of time, it's roughly 2 cents or about 10% off the retail rate. So, on a go-forward basis, because what you're competing with is old technology, the average age of the plant there that burns diesel and HFO is about 35 years. So, you're talking about heat rates that are 12 or 13, versus, you know, brand new technology today, which would be six, six and a half, so roughly twice as bad.

Speaker Change: Okay, and then switching gears you put out a 1.5 billion dollar gross capex number what's the composition of it and have a nice does that sound like do you want at this stage and I think in footnote 21. He mentioned that there is excluded interest. The capitalization is is that a material number.

Speaker Change: Yeah. So the 1.525, it really breaks down to a little we don't break it up by project, but total F. O N G spend in the year is about $600 million about $400 million into Brazil to complete various you know work.

Brannen McElmurray: So, once you pair that off with the fact that the delivered cost of distillate fuel there is well in excess of, you know, what anybody would really think because of both where they source it from and also the delivery charge, you know, you have a lot of headroom to compete with. So, for example, you know, if you look at the price of diesel today, it's roughly about $22 a MBTU. And so, anything less than $22 in MBTU today is a win for the Puerto Rican rate pair. So, there's a lot of headroom in those kinds of numbers. Okay, and then switching gears, you put out a $1.5 billion gross capex number. What's the composition of it, and how much is that balance you want at this stage?

Speaker Change: On the power plant plus that's an annualized number right. So that's got some money that's already been spent thus far in Q1 finally, you've got about $200 million and we expect to spend on fuel switching in and around Puerto Rico over the next two years and so it's about half in 2024 stars capitalist interest, yes, that's exclusive in that number.

Speaker Change: <unk> and then it's less than 100, my boss and then right after that I thought we might ask in salt I'll answer the questions. So with the 700 million dollar apology to financing being committed are now fully financed basically as a company and now that we've been have announced a results and and have have kinda updated people on the company but.

Brannen McElmurray: And I think in footnote 21, you mentioned that there's excluded interest capitalization. Is that a material number? Yeah, so the 1.5, 1.25, it really breaks down to a little, we don't break it up by project, but total FOMG spend in the year is about $600 million, about $400 million into Brazil to complete various, you know, works on the power plant. Plus, that's an annualized number, right?

Speaker Change: Definitely going to evaluate potential refinancing opportunities to address are shorter term maturities in our bond books. So we are going to actively man monitor the market conditions, and that's something which now can arise as to the right level. So uhm. Every every flower has this season and we needed to get through <unk> have a couple of quarters.

Speaker Change: Performance is we have.

Christopher S. Guinta: So that's got some money that's already been spent thus far in Q1. Finally, you've got about $200 million that we expect to spend on fuel switching in and around Puerto Rico over the next two years. And so it's about half that in 2024. As far as capitalized interest is concerned, yes, that's included in that number, and it's less than $100 million.

Speaker Change: Basically clarify both performance as well as Capex and a business updates that a material on both Puerto Rico, and Brazil and elsewhere, but we are definitely going to monitor a market conditions and evaluate you know different opportunities, we got to to address yeah, especially the shorter term maturities of that so.

Speaker Change: And that was our final question from the audience today, Mr. Pepitone I'll turn it back to you Sir for any additional or closing remark should I have.

Wesley Robert Edens: And Ryan, I thought we might ask, and so I'll answer the question. So with the $700 million FLNG2 financing being committed, we're now fully financed, basically as a company. And now that we have announced our results and have kind of updated people on the company, we're definitely going to evaluate potential refinancing opportunities to address our shorter-term maturities in our bond books. So we are going to actively monitor market conditions. And that's something which now kind of rises to the right level. So every flower has its season, and we needed to get through kind of a couple quarters of performance as we have basically clarified both performance as well as capex and the business updates that are material in both Puerto Rico and Brazil and elsewhere. But we are definitely going to monitor market conditions and evaluate, you know, different opportunities we've got to address, especially the shorter-term maturities of that.

Pepitone: Thank you Lisa. Thank you everyone for joining us today again, we remain available is always to answer any questions. Please contact the investor relations team and thank you were done enjoy the rest of your day.

Speaker Change: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.

Speaker Change: [music].

Christopher S. Guinta: So, that was our final question from the audience today. Mr. Pipitone, I'll turn it back to you, sir, for any additional or closing remarks you may have. Thank you, Lisa, and thank you, everyone, for joining us today. Again, we remain available, as always, to answer any questions. Please contact the Investor Relations team, and thank you again. Enjoy the rest of your day. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect. Thank you for watching, and please Like, Subscribe, & Comment on where we head to next!