Initiating Coverage of EE at Buy and NEXT at Neutral

Research evidence excerpt

Initiating Coverage of EE at Buy and NEXT at Neutral

Goldman Sachs Americas Pipelines and MLPs

Three key drivers of our Neutral outlook on NEXT:

1. Near-Term Capacity Ramp Likely a Positive, Though Well-Telegraphed: NEXT is

finishing construction on the first of its five Rio Grande LNG trains with first LNG

expected within 1H27. We believe NEXT’s known liquefaction kit and reliable

construction contractor, Bechtel, will support positive operational updates. That

said, we believe the near-term capacity ramp and early volume potential has been

well-telegraphed by management.

2. Highly Contracted EBITDA at Project-Level, but Equity Waterfall Is Less

Transparent: Approximately 85% of NEXT’s consolidated liquefaction capacity is

contracted under long-term take-or-pay, sale-and-purchase agreements (SPAs) with

investment-grade counterparties. Thus, consolidated EBITDA is relatively insulated

from movement in spot commodity margins. That said, given promoted equity

distribution splits to project partners, debt service requirements, and corporate

level cash drags, we expect DCF net to NEXT to grow more slowly vs EBITDA growth.

Furthermore, because the exact mechanics, timing, and priority of cash distributions

are not fully transparent, cash flow from the project boxes net to NEXT common

shareholders is less visible than headline consolidated EBITDA metrics suggest.

3. Growth Beyond T5 Possible; Awaiting Commercial Updates and Funding

Progress Before Underwriting T6+ Growth. We note the potential for NEXT to add

up to five additional liquefaction trains to its Rio Grande site over time. Illustratively,

we note a 6th LNG train could add $1-2/sh of equity value, as we discuss below.

However, we are cautious on underwriting incremental growth at NEXT given 1) we