Details on 'PI' Financing to Come; But is the Market Hungry for LNG Expansions?

Research evidence excerpt

Details on 'PI' Financing to Come; But is the Market Hungry for LNG Expansions?

We see an expanded rationale

for doubling down on LNG development amidst a reinvigorated global outlook and several (previously

improbable) LNG FIDs have taken place. Given the still recently anointed CEO Chad Zimmerman

previously worked at Cheniere, we have seen an ongoing debate in the community on just what the

extent of growth should be tied to LNG directly. We see WMB's ideal position in Gathering assets in

the Haynesville region as driving real merits to expanding long-term strategic offtake from LNG - as

well as expanding its strategic linkage between the two geographies. We perceive some concern on

the need to compete even in Louisiana with expanding Permian offtake (an emerging bear thesis in

recent months on WMB): we stress the added infrastructure to assure direct linkage of their position to

LNG should help derisk this fear if anything as well. Admittedly, actions that suggest that management

perceives it is seeking to capitalize on its relative currency could drive a cautious reaction. We have

heard loud and clear from investors that the capital priority waterfall should be natural gas pipeline 'organic'

expansions on TransCo and/or Northwest followed by Power growth. M&A is frowned on more than usual

as coming at premium valuation and utilizing the scarce balance sheet capital.

Power Innovation Continues to Validate the Bull Case. We expect ever larger projects to be sourced.

2Q should have a pronounced focus on PI translation as BTM projects appear poised to accelerate across

all of our channel checks. If not 2Q precisely, we see 2H26 as among the most ripe windows since the

PI strategy was announced. Industry feedback remains consistently robust on the scale and scope of