Good morning, everyone. Thank you for waiting. Welcome to the conference call to discuss first quarter 2026 earnings results of Compass Gás e Energia S.A. I would like to inform anyone who needs simultaneous interpreting that this feature is available on the platform. To access it, simply click on the interpretation button via the globe icon at the bottom of the screen and select your preferred language, Portuguese or English.
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This conference call is being recorded and can be accessed in the company's IR website at www.compassbr.com, where you will find the full package of our financial disclosure. You can also download the presentation using the chat button. During the presentation, all participants will be in listen-only mode. Later, we will have a question and answer session.
After the presentation, we will start the Q&A session with Marcos Fernandes, CFO, and Mr. Antonio Simões, CEO. Questions should be submitted using the Q&A button at the bottom of your screen. We kindly ask you to identify yourself when submitting questions. The questions will be read aloud by the operator. Statements contained in this presentation regarding the business outlook of Compass Gás e Energia S.A., its projections and growth potential are merely forecasts and are based on the management's expectations regarding the company's future.
These expectations are highly dependent on changes in the market, the country's overall economic performance, the industry, and international markets, and therefore are subject to change. Forward-looking statements are not a guarantee of performance. They involve risks, uncertainties, and assumptions as they refer to future events and therefore depend on circumstances that may or may not occur.
Investors should understand that general economic conditions, market conditions, and other operational factors may affect the future performance of Compass Gás e Energia S.A. and lead to results that differ materially from those expressed in such forward-looking statements. Now I will turn the floor to Mr. Marcos Fernandes, Compass CFO.
Good morning, everyone. Welcome to Compass presentation on our first quarter 2026 earnings results. Please note that all information contained in this presentation pertains to our subsidiaries Comgás, Sulgás, Necta, and Compagas in the distribution segment and Edge in marketing and services.
We will begin our presentation with the slide with our operational and financial highlights. The distribution segment ended the quarter with over 3.1 million customers connected, an addition of 190,000 new customers over the last 12 months. We distributed 13.9 million cubic meters of natural gas per day and continued to expand our distribution network to over 28,000 kilometers.
In the marketing and services segment, in the first quarter of 2026, Edge sold 4.6 million cubic meters daily on the domestic market, with a particular focus on the continued expansion of volumes in the free market, reinforcing the company's position as a relevant player in this segment through its diversified origination strategy. This quarter, the off-grid B2B LNG operations and the biomethane plant started operating, making Edge an integrated platform for natural gas, LNG, and biomethane in Brazil. Compass EBITDA totaled BRL 1.3 billion.
Net income was BRL 382 million, and we ended the quarter with a net debt over EBITDA ratio of 2.2x . We will now move on to the operational performance review for the distribution segment. In the first quarter of 2026, we distributed 13.9 million cubic meters per day, up 1% compared to the same period in 2025.
In the residential segment, we ended the period with a 5% increase, driven by growth in the connected customer base, as well as milder temperatures during the quarter. The industrial segment was up 1% in the period. The highlight was the increased cogeneration volumes among various customers, in addition to the food and glass sectors.
Although the mobility sector is still at a competitive disadvantage compared to other fuels in the light-duty vehicle fleet, it is already beginning to show positive results through the distribution of natural gas for heavy-duty transportation, a significant step forward in the country's decarbonization agenda.
Lastly, the commercial segment remained consistent between periods. As a result, the distribution segment posted total EBITDA of BRL 1 ,0 57,000,000. This is a 10% increase compared to the same quarter of the previous year. We now turn to the performance of the marketing and services segment represented by Edge. In the first quarter of 2026, 416 million cubic meters of natural gas were sold, a 27% increase year-over-year. This was driven by the expansion of the free market and the growing number of customers served through various origination sources.
It is important to note that Q1 2026 marked a new milestone in the strategy of Edge to consolidate an integrated platform for natural gas, LNG, and biomethane in Brazil through the start of operations of the off-grid LNG for B2B customers and the biomethane production at OneBio, Brazil's largest biomethane purification plant. EBITDA for the first quarter of 2026 totaled BRL 312 million.
By normalizing EBITDA in both periods, aiming to recognize the financial impact in the same period in which this volume is delivered to customers, we ended the quarter with EBITDA of BRL 187 million, up 36% over the first quarter of 2025, which stood at BRL 138 million, reflecting higher on-grid volumes and gains from load optimization. In addition to the results from our new off-grid B2B LNG operations and the biomethane plant. We now turn to the company's consolidated financial performance.
We reported EBITDA of BRL 1 billion, 329 million, driven by higher volumes and a better mix in the distribution segment, as well as the expansion of Edge’s on-grid volumes. In addition to the start of the new off-grid B2B LNG operations, the biomethane plant and load optimizations in the marketing and services segment.
By normalizing EBITDA in both periods to reflect the time adjustment of advanced shipments in this quarter with the aim of maintaining the financial impact in the same period in which this volume will be delivered to customers, we ended the quarter with EBITDA of BRL 1 , 204 ,000,000 a 12% increase compared to BRL 1 ,0 72,000,000 in the same period of the previous year. We recorded net income of BRL 382 million, a reduction of 9% compared to the first quarter of 2025.
This resulted from those EBITDA variations already explained, higher depreciation due to new projects that came online, in addition to higher financial expenses. We ended Q1 2026 with investments amounting to BRL 400 million, primarily allocated to expanding gas distribution in accordance with the regulatory plans of distribution companies.
Moving on to the slide on the company's debt, we ended the period with net debt of BRL 11,121,000,000 . 90% of this debt is long-term and 92% is indexed to CDI with an average cost of debt of 100.7% of the CDI. During the quarter, we raised BRL 2.6 billion in long-term debentures through our subsidiaries, Comgás, Edge and Compagas, with part of the proceeds used for liability management. Lastly, leverage closed at 2.2 x net debt over EBITDA ratio, demonstrating once again our discipline in capital allocation.
Moving on to the next slide, we will discuss the company's initial public offering. On May 11, Compass began trading on the Novo Mercado, B3’s segment for companies with the highest standards of corporate governance under the ticker symbol PASS3. The deal was the first IPO in the last five years and the second largest utilities IPO in Brazil in the last 25 years.
In total, the deal could reach up to BRL 3.2 billion. Following deal completion, the company's ownership structure will consist of approximately 75% of the shares held by the controlling shareholder and a free float of close to 25%. The total offering size and the final shareholding structure may vary depending on the allocation of the overallotment option greenshoe. I would now like to turn the floor over to Antonio Simões, our CEO, for some additional remarks. Thank you very much.
Good morning, everyone.
To start, I'd like to say I'm very pleased to be here today. I'd like to thank you for joining us and for your interest in the company. I would just like to add information on this last part of the presentation about the IPO that was completed. This is a process, as I mentioned in some prior occasions, that started way back in 2020 with the dream of transforming the gas market. Since then, we've been building this with a lot of consistency with deliveries, and this was reflected on great conversations with the market. We started the process with the road shows and in the first quarter, and just this past Monday, we had our first IPO in Brazil in five years.
I think that this is a new chapter for us, but it is a chapter that reinforces values which are crucial to us, such as governance, transparency, commitment to execution, and we are very excited and we are very confident with what's coming ahead. I'd like to thank everyone for your interest.
In the earnings conference call, well, this is a practice that we adopted since the beginning of 2024. Regardless of being listed in the stock exchange, we wanted to be closer to you, to the market, and to us, this is a new chapter. But it is rather a continuation of what we've been doing already. Thank you very much. I just wanted to say this at the start, and we can now start the question and answer session. Thank you.
Thank you. We will now begin the question and answer session with Mr. Antonio Simões, CEO, and Mr. Marcos Fernandes, CFO. We kindly ask you to identify yourself and ask all questions at once, and then wait for the company to answer. As a reminder, to ask written questions, you just need to click on the Q&A icon at the bottom of your screen and send your question. Our first question comes from Antonio Junqueira with BTG Pactual. Mr. Junqueira, go ahead.
Good morning. I have a couple of questions. First, if possible, could you give us an update on the signing of gas supply to thermal power plants? Because I understand that many of the power stations that you supply to are existing plants, and I imagine that some of them will start their new contracts with ONS this year, some next year, some in 2028.
On that point, I'd like to understand what would be the timeline. How much has actually materialized into contracts?
Thank you, Junqueira. I'll start and then Marcos will complement. In terms of Q1 2026, we haven't got any news on that. We're continuing the process of negotiation, and as you put it yourself, to join an auction, a good part of the players ended up receiving non-binding offers. Some were binding offers, but the majority participated in the auction through non-binding offers.
In this stage that we find ourselves in, we are transforming this process of non-binding offers into contracts. There's nothing really that we can communicate right now. What I can say is that a good part of the projects that we supported, regardless of being non-binding offers, moved to the second phase of being considered in the auction b ut the discussions continue, and there are no conclusions at this point.
Our intent is to be structuring these offers through our terminal, because that gives us great flexibility. We have spoken about this in the past. But we also have a limited capacity. So our review is one to optimize, to maximize the use of our infrastructure, because this gives us a certain competitive edge. But truly speaking, there is no update to give you at this point.
My question was not about the first quarter. I just wanted to understand when we should expect, of course, you won't be saying that this plant will come in in 2026 or 2027, but in terms of the X amount gained by 2027, I should have an answer by mid-2026. I just wanted to get a timeline of when we should get some news so we won't have misaligned expectations.
I cannot really give you a timeline or a deadline. I believe that the plants that will start supplying before will feel more pressure to sign a contract. But this is happening as we speak. There is no specific deadline for these contracts to be signed. Depending on the player, they can actually continue with no contract at all in the beginning. So, we cannot really give you a deadline, a date, because this pressure is a lot more on the gas buyer side than on our side. The discussions are progressing, but we have no pressure to sign a contract on a specific date.
Okay, Junqueira. As soon as we sign these contracts, we will inform the market. At this point, we don't have anything to give you, but as soon as we have the contract signed, we will communicate to the market.
Now, changing gears. About load optimization, it became clear the adjustments you make that you have always made. There is BRL 70 million of result associated with future deliveries. Could you tell us about load optimizations after March, considering that the conflict in the Middle East continues, are there more opportunities arising? Or what you did in Q1, which includes BRL 130 million of future deliveries, does that include this whole period of the war until today? Or in Q2, should we expect the company to have even more load optimization gains or not? Or if this three-month war period, can we understand that the Q1 earnings already reflect the full war period?
Okay, I will start, and then I will give the floor to Marcos. Let me speak about the war context. We get that question frequently, particularly in the last few months.
To remind you, this conflict started exactly in the turn of February to March. It started in Q1. Marcos will speak about this. All right, but how do we see what is happening? There is some concern, of course. Such a conflict has short, medium, and long-term consequences, but we are also concerned as citizens. Of course, we are hoping to have a quick resolution of the conflict, and we are ready to deal with the consequences because we have had a number of other similar crises in the past.
Now, the effect on us, on distribution in the short term, the effect is zero because we do not carry any commodities risk, unlike other countries where distribution companies have a commodity risk. But we have a pass-through structure and a good part of the customers, which are the most impacted, the large industries, they are in the free market already.
They have a little more sophistication of this kind of risk. In the medium to long term, we cannot really tell. We have some industries, like the petrochemical industry, with a little more consumption, some others suffering a little more. It will really depend on how long the conflict will last, the effect will last, and how oil prices will behave in the future. In the case of Edge, in the short term, we do not carry a commodity risk either. We always want to stress this. We are always working back-to-back. But this volatility does bring us opportunities for load optimizations. Now I will give the floor to Marcos to tell us what happened in the first quarter.
I will use your question, Junqueira, because there is still a lot of doubts when we talk about EBITDA and when we normalize EBITDA.
To give you some more clarity to you investors, what happened in Q1 was we had opportunities given price movements in Europe, and we were able not only to optimize loads for the quarter, but some loads that would be delivered to customers in subsequent quarters. So why do we normalize EBITDA? Because due to accounting standards, all future loads need to be accounted for exactly when the deal is complete.
We need to post that because it is performed, it is part of our results. However, this is not trade, and that is a point to explain because we have many investors, and they claim that Edge is in trading. But it is not in trading because these are optimization operations. They are referring to volumes that will be delivered by Edge through other sources.
The moment that we agree to optimize a volume in the current or in the subsequent quarter, Edge needs to have back-to-back with another volume. It goes to several sources of supply, from Bolivia, from the pre-salt, even from Argentina sometimes, and Edge contracts this volume.
What we do in terms of deferral of results is aiming to bring investors a correct view of what is happening. We remove part of the result, which was the case of Q1 2026, and we account for it when the physical sale operation will actually happen. I would like to remind you that the load assignments happen in the beginning of the year. All of these amounts that we will defer will be deferred throughout 2026. This is now trading. We do not take any directional position. There is no risk in the operation.
It is simply replacing a volume that will be delivered to customers. A volume of LNG, it will be delivered with a different volume, and in the end, we are going to have better margins. These opportunities arose in Q1 with everything that happened with the war. We have other loads, and of course, if they are displaced, if it makes sense to TotalEnergies and to Edge, we will always want to optimize our margins. Okay? This is what I can tell you.
This happened in 2024. This happened in 2025. Not necessarily because of war scenarios, sometimes because of a more rigorous winter in Europe and other things, and that is the beauty of Edge. Edge created a supply portfolio to supply to all customers, either on grid, where we have the DisCos, and we have the free market that has been growing since the beginning of 2024.
Edge was one of the pioneers driving that market. Now with the thermal plants and so on and so forth, we will always be looking at our portfolio, trying to improve our margins. But as a reminder, this is not trading. Okay, Junqueira?
Next question from Mr. Eric de Mello with Itaú BBA. Mr. Mello, your microphone is enabled.
Good morning. Thank you for taking my questions, and congratulations on the IPO. I have two questions, more focused on Edge. First, regarding a small-scale operation, could you give us an update on phase II in terms of timing and investment expectation? And the second, as a follow-up question on load optimization regarding the contract of TotalEnergies, considering relevant revenue sources you had in 2024, 2025, could you give us more color on the advantages and pricing flexibility? What kind of advantages does the contract give you? Thank you.
Eric, thank you for the question. I will start with the first question on phase II. But before speaking about phase II, we have to speak about phase I. We started our operation now in February. We had communicated that we have a large industrial customer in the pulp industry, and we did phase I, aiming to test the thesis, test the operation, and make sure that the market will understand, and we have been very successful. So we started in February.
We managed to have our investments on the barge, on the trucks, and on our customers, everything running very smoothly. Our trucks are being loaded at the TRSP. This customer is in Minas, about 700 km away from the Port of Santos. This customer has seen the operation and has liked very much the way we are running the operation.
And this gives us an opportunity to discuss phase II. Of course, phase I is not just to serve industrial customers moving fuel oil, diesel, LPG, and others. We can bring benefits to customers and decarbonization, but we also want to have long-distance diesel transport. We are looking at this to complete phase I. As we move forward and discuss with our customers to complete phase I, we will start discussing phase II with our shareholders.
I cannot really give you a final deadline, a final date at this point. What I can say, though, is that we are much more able to discuss with our shareholders. We can show that the addressable market understands our operation, and only then can we discuss phase II. As regards to phase II investments, as soon as we approve phase II, we will inform you all the amounts.
What I can say is that just like in phase I, we expect good returns. These are capital allocations at the Compass level. Looking at opportunities we have, this is an investment that makes a lot of sense to us in terms of capital allocation. Now, speaking a little about your second question of comparing load optimizations between the years.
What I can say is that every year, we understand that opportunities will appear. It is hard to say whether one year will be better than the previous one because every year is different when we talk about these displacements. In previous years, in 2024 and 2025, we did not have a war scenario as we are having this year. But last year, we had a very difficult winter in Europe, which made the demand different, and that helped us. But we do not have this goal of comparing this.
We think that every year will have its opportunities, and we will be optimizing the margins of our clients. I do not know, Antonio, do you have anything to add?
As we have always said, Eric, the terminal is an asset that gives us this kind of flexibility. Our priority is always supply to customers. No action is taken, regardless of any displacement, without a guarantee of supply. This depends not only on the foreign market, but also on the domestic market. The beauty of the model is that it adapts to any type of optimization. More recently, we have seen the market driving loads. Europe, particularly in recent years, needing more supply and pricing for that. With the war, even Asia is moving a little. They are the most impacted. Most of the volume leaving the Gulf was destined to Asia.
But when we look at the supply-demand balance, looking forward, an expectation of oversupply could bring us more opportunities. What we are saying is that the assets give us an opportunity regardless of the scenario. We are prepared to deal with this and try to maximize. Actually, not maximize, but rather optimize. We have firm contracts that drive our earnings and will only make a change if the goal is to optimize, to maximize, to reduce costs, and increase our margins.
Excellent. Thank you very much.
Next question from Bruno Amorim with Goldman Sachs. Please, Bruno, proceed.
Good morning. Thank you for taking my questions. My first question is a general one regarding the outlook for Edge. It would be interesting if you could update us on the main growth drivers for 2026 and 2027. Where do you think more growth for Edge is coming in these two years?
My second question regards the conflict in the Middle East, which led to a certain imbalance in the global gas market. Have you felt, and have you signed contracts with customers that want to ensure supply in the coming years? The reason I ask is I am trying to understand whether this conflict created any opportunities for the company to sign long-term contracts. Thank you very much.
Thank you, Bruno. I will start with your first question about growth drivers for Edge, and then Antonio will speak about issues related to the war. We always like to remind everyone that Edge is only two years old. We had a clear thesis for Edge, starting with on-grid. We would have the terminal, the terminal that brings us flexibility, and then it brought us several supply sources for us to operate. I would like to remind you that Edge is a company of customers.
That is important. When we had the terminal, we started with a Comgás contract, and our goal was to unlock the free market. We started in 2024 with very few customers. In 2025, the customer base increased and volume is increasing. First point, we cannot speak for the future, but we have been growing volume in the free market.
In this last quarter, we have volumes which are much higher compared to Q1 2025, and this has been happening. We have the distribution company, and we have the free market. Another important point is the decarbonization agenda with the Onebio plant. This aimed at giving more opportunities to customers having gas decarbonization with a biomethane plant. Now the plant is ready, and we can run with biomethane, with more opportunities for our customers who have a full contract signed, including biomethane.
Here we expect improved margins when we speak about delivery of natural gas/biomethane. Speaking about off-grid, which is also another important driver to grow Edge and Edge volumes and margins. We start operating now in Q1. As I mentioned before, in February, we start operating with the first customer.
As we sign other contracts, this volume then can get up to 400,000 cu m. This will increase throughout the year. As much as possible, we will approve a phase II. We have been talking about this over and over in the prior quarters, and here growth will come in terms of increased volumes and margins. Another point we mentioned before in terms of on-grid, which is LRCAP, the reserve auction, reserve capacity auction.
As we supply to the TPPs, the thermal power plants, we will have fixed margins because I will be ushering delivery to thermal plants, but also during dispatch, I will have a margin linked to volume that will be dispatched. These are the main growth drivers. In terms of off-grid and biomethane, this is already operating in the free market, in delivery to distribution companies. Now we see things happening. The assets are there, the investments have been made, the primary ones, at least. The only thing we still need to do is to increase volume in a possible off-grid B2B LNG phase II. Antonio?
Bruno, I will try to make an additional comment to the one I made about the war and the impact of the war. We are being very careful not to make any projections. I cannot speak about Q2. We are talking here about Q1 2026.
But if we think about the medium term, what is happening over there, most likely, this will shed some light on some regional advantages. I am not just talking about Brazil. I mean Brazil, supply projects. I mean Argentina, perhaps making higher volumes enabled. Because the global impact is much greater than the impact on us, more specifically, and on our customers.
One curious example. Imagine if you are the CEO of a utility company in Japan, and you had a contract with some country in the Gulf to supply part of your demand, a 15-2 0 year contract. Are you going to sign another such contract, or are you going to look for another source? This can favor our region. We have a number of things happening.
In addition to Argentina, we have projects in Brazil, and then there are other countries pointing to a more favorable investment environment. So I think that overall, it is positive for our region. Comparatively, our industry is having more competitiveness, coupled with the agenda that we have in our country of adding more competitiveness to natural gas to reduce additional infrastructure costs and make gas more competitive and have more transparent contracts.
All of that is welcome, and it can point to a promising scenario looking forward. But again, I am just analyzing what is happening in the Middle East versus our own region. In Q1, the effect is limited. We had the conflict starting from February to March. We will still have to wait and discuss the unfoldings of this war in the future. Thank you.
Next question from Giuliano Ajeje with UBS. Mr. Ajeje, your microphone is enabled.
Thank you. Good morning, everyone. I would like to start with two questions, Antonio and Marcos. I will go back to the point related to the war, but from a different point of view. The first question is, we haven't seen the impact of the war on the captive market. So I would like to get a qualitative opinion from you of what can happen with the captive market when the war starts impacting the tariffs.
I would like to get your view on when it would be viable to migrate to electric systems. That is my first question. Second, I would like to understand the migration of customers from the captive to the free market. We saw a significant percentage in Q1, so I would like to get a qualitative view from you if that phase will continue, and how this could impact 2027. These are my two questions. Thank you.
Thank you, Giuliano.
I will start speaking about the captive market. Indeed, we have not got any effect yet. There is a lagging, a delay in passing through prices because of the contracts and the concession rules. So there is a lagging there. There is a delay. This will cause a price displacement, as we are seeing in other commodities. The impact should be small, because natural gas, it is not just the only one getting more expensive and inducing a reduced consumption.
There is a comparative effect, and in this comparative effect, there are other delays of pass-through because of the structure. This will determine our competitiveness. I think that there will be little effect in the short term, little elasticity. Okay? But just to give you an example, there are also opportunities linked to this, both for natural gas and for biomethane.
They are becoming more competitive versus diesel, that had a much higher price increase because of the diesel processing margin. This should continue even after the conflict in the Middle East ends. This might bring us opportunities to accelerate the development of the mobility sector through LNG or CNG.
There is also a question regarding affordability. How much of the customer portfolio is impacted by this. But like I said, it is a matter of comparison. It is not so easy to migrate. We are working to try to mitigate this as much as possible. Even Petrobras has announced that they will try to mitigate this, to attenuate this b ut we have to know that this effect is much more related to inflation rather than consumption. Given the difficulty of alternating to other energy sources, and other energy sources are becoming more expensive as well.
There is very little effect initially, but we will be able to speak more about this in the future if there is any effect. I will answer the question on the free market and how it has been unfolding. It is always good to remember that before Edge, the free market was practically non-existent, and it has been evolving a lot in the recent couple of years, and it is almost accounting for 60% of the captive market that migrated to the free market in the last two years.
In terms of our assets and our distribution companies, they are not affected by this because gas is pass through. We continue to get a distribution tariff and margin. On the side of Edge, this creates more opportunities of new customers. This is happening. We expect that this will continue to happen because the industry has understood this movement.
They understand that these are more competitive contracts, more flexible, and they can get the gas. Edge is very well-positioned to continue moving forward as we see migrations from the captive market to the free market. Edge will continue to position itself and get a good part of the market share, what we call a fair share. We will be well-positioned for future migrations because Edge is a company that is very close to customers. It likes to understand customers' needs and provide them with the right solution. As customers migrate, we will have more opportunities to grow our volumes and margins.
Excellent. Thank you very much, Antonio and Marcos.
Next question from João Pimentel with Citi. Mr. Pimentel, your microphone is enabled.
Good morning. Congratulations on the successful IPO. I have a question about Edge.
I think that the bulk of the interactions we had with customers was about this part of the business. I would like to understand. You have a growth coming from off-grid. You have free market customers growing, biomethane, you have thermal plants. I do not know if you can explain, but perhaps you could list in an order which one of these offtakes monetize your gas the best.
In other words, I would like to understand, ideally, what would be your preference to monetize your gas, where you have the highest margin for gas. My second question is, with the end of the TotalEnergies contract in 2033, how do you understand the margin dynamic after the TotalEnergies contract? Either because it is a favorable contract, so what do you expect by 2033? Do you have any negotiations on the way? Also because you have more supply.
There are other terminals that are being developed in Brazil. There should be another one, a new one in the southeast. I am just thinking about the longer term. I would like to understand perhaps a ranking of margins where you would monetize your gas the best.
Thank you, João, for the questions. I will start here. There are several questions in your questions, actually, and Marcos will help me. As regards prioritization of allocation, if we have any preference in allocating the gas, I think that the simple answer is no, because these different avenues are not competing. On-grid gas is an evolution that we see almost as an inertial evolution. This movement already started to happen with more than 15 million cu m migrated. What matters is that the customers are seeing benefits in migration.
We believe that this will continue for mid-size customers. We are going to get a high level of migration. For this volume, we partially use the terminal and the regasification portfolio. In Brazil, in Bolivia, even in Argentina, we were able to import gas. We have a diverse supply source so that we do not have to compete, or we can use the best way to supply our customers.
Off-grid, since it uses liquid gas, it does not even compete with the terminal's regasification potential. Just like we said in a previous question, we will continue with phase I. We had an excellent experience at the start of operations with a very relevant customer, an operation that is running really smoothly and achieving our target volume. Now we will continue in other sectors, particularly mobility. We bet a lot on that because it is economical. It should grow.
I would like to remind you that we import a lot of diesel. Like I said, diesel had a price displacement, and this will impact the market. Things do not compete with each other. Biomethane, it is another molecule, and it will support our offering for on-grid and off-grid volumes.
In the case of on-grid, any type of blend, any product blending with natural gas and offering customers a good decarbonization opportunity is excellent. This is a mandate that gives us some assurance and also looking at off-grid. We are seeing this has been even more competitive. There is no competition between these avenues, these streams. Our goal is to develop these markets in parallel and to continue to grow the business, and at the pace that the market presents the opportunities to us. I will speak about the TotalEnergies contract.
I would say that we were very fortunate to sign that contract with TotalEnergies. It is a long-term contract. TotalEnergies also saw the development of natural gas. For them, it is important to work with us. The contract is performing well. We are frequently asked, the question is whether we can guarantee supply, the war, et cetera.
The CEO of TotalEnergies made it very clear that they will be enforcing all of the contracts. We have received a load in Q1 since the start of the war, so everything is running well. What matters is that this is a 10-year contract. It was signed prior to the war. At the time when we signed the contract, we did not know that we were going to have a war. That was a market moment that led to that price level. We are in the third year of the contract.
This is a 10-year contract, so we have only 30% of the contract, and there's still a lot to come. When we look at LNG in 2029 and beyond, all projects that are underway, when they are ready, the offering of LNG will be there. That will probably drive prices down. LNG prices should fall, and the moment that we have our portfolio, getting gas from the pre-salt from Bolivia, et cetera, I can have even more LNG.
So at the right moment, we understand that this contract is with the correct supplier. If we can renew the contract, we will move forward, and that will be the right timing to renew the contract. There is a lot to come. We only have 30% of the life of the contract, so it's still too early to speak about the future.
All right. Thank you. Super clear.
Next question from Antonio Junqueira with BTG. Mr. Junqueira, go ahead.
Hello. Thank you again. I'd like to understand the decision-making process. You have 0.4% capacity today. I think it will take some time for you to achieve this 0.4% installed capacity, and you naturally have a plan that you communicated during the IPO process of increasing that capacity to 3.8%. Of course, this involves a lot of investment and mobilizing a lot of people. What is the decision-making process like?
Will you wait until you achieve the current installed capacity, or are you going to have extra contracts? What can we expect in terms of what's driving your decision so that we can see the cold figures and try to anticipate your moves?
Thank you, Junqueira, for the question.
One of the things that we needed to be sure about is that the operation would run, and that we would have demand for this type of operation, and that has been proven in terms of the industry. Using our current operation, we look at our current operation, we see it as very successful. We are talking with other players.
We know that we'll be successful. We have also been talking about diesel displacement to have long-haul trucks for LNG. As we sign the contracts, we will be taking this to the board of directors for approval. We've been talking to our board about this. They know about our ambition. Throughout this year, we'll just need to unlock the value, unlock the project, and start the project. There are no big ties at this point because we have proven that the thesis is correct.
What we are doing as we speak is leaving everything ready so that at the right timing, we'll get approval. This is basically it. As soon as we take this to the board and approve this with our shareholders, we will communicate this approval to the market.
All right. Thank you. I have another question. Are you thinking about having a formal guidance in the future? The Cosan Group historically had it. Is this something that after the silent period, are you intending to do this?
At the moment, we aligned with our shareholders that we would not provide a guidance. We provided a CapEx guidance last year and in the prior year as well. But this year, with our new shareholders, we agreed that we will not provide any guidance. So far, we don't expect any guidance.
And lastly, in the previous question, you mentioned that if you were negotiating to sign the contract with TotalEnergies, you would not do it. Did you say that or did I misunderstand?
Junqueira, no. Marcos Fernandes' point was that if we had an offering to renew the contract seven years before the end of the contract, we wouldn't have any reason to do it. I think that the market is kind of anxious to know what's going to happen in the next seven years. We think that we are going to have a number of better opportunities to renegotiate this contract in the future. So to Marcos Fernandes' point, just to clarify is, if we had an offer to extend the contract as it is for another 5- 10 years, today, there would be no reason to do it. There is a lot to happen.
This contract was drafted aiming at a long-term partnership, not just a 10-year partnership. We have a relationship that is becoming more and more solid with everything that is happening. We have shown this on our end, and I'm sure that they are very happy on their end as well. So we have everything to renegotiate, re-discuss, increase or decrease, whatever. I think it is way too early for us to make a decision about this contract because it's barely started.
There is a lot to happen. That was Marcos point, that today is not the right time to discuss an extension of the contract. We have a supply-demand dynamic that points to a number of other opportunities happening in the future.
So we prefer to continue to develop the market, which was our agreement with TotalEnergies, using the flexibility of this contract that we signed, but of course, paying attention to other opportunities that might be created in the future. In two to three years, can you imagine what this market could be like? So this is Marcos point. It's way too early to discuss 2023. We get that question a lot, and the contract has barely started, so we wanted to make this clear.
Excellent. Thank you very much.
The question and answer session is closed. Now we would like to turn the floor over to Marcos Fernandes for his closing remarks.
Well, I'd like to thank everyone for joining us today. This was another quarter with very solid earnings with a stretch of important projects at Edge.
We spoke a lot about B2B, GNL, about the biomethane plant starting to operate. We'll continue with a lot of focus and discipline in our execution with safety, operational excellence, always aiming to maximize the efficiency of all of our assets and having a lot of capital discipline. We expect to see you again in the earnings conference call for the second quarter. Thank you very much.
The Q1 2026 Earnings Conference Call of Compass Gás e Energia S.A. is now closed. The Investor Relations department is at your disposal to answer any further questions. Thank you very much to all participants, and have a good day.