From an LNG market standpoint, we continued in 2021 to see a robust market signaling that, as the energy transition evolves, LNG remains recognized as vital to global efforts at decarbonization. Whether in Europe or in smaller developing nations, it remains clear that if we are to truly make progress toward decarbonizing our world, LNG is the answer and we need more of it. Freeport LNG is proud to be a leader in this effort with our all electric motor-driven facility – reducing our emissions by over 90% relative to gas-turbine driven LNG production plants. A carbon free energy future requires development and production of LNG today, and we are committed to doing our part in this global effort.

As we publish this annual report, the heartbreaking scenes unfolding in Ukraine and the impact of Russian aggression on European energy supplies and prices are a stark and tragic reminder of the critical importance to our society of maintaining energy security as we navigate the transition to developing alternative forms of energy. LNG, and particularly U.S. LNG, provides the world with a stable and reliable energy source, while offering flexibility in delivery terms and significant environmental benefit.

The foundational core and top priority for us is safety. In July, we marked 13 years without an employee recordable incident. This is an amazing achievement and one that we celebrated across our organization. Freeport LNG’s safety record remains in the top quartile in our industry. Our company’s success is directly aligned with safe operations. There are no exceptions and no compromises. Every employee plays an important role in maintaining our commitment to safety, and that is certainly evidenced by the milestone we achieved in July.

By mid-year, we were able to mark another notable operational milestone. In June, after over a year of having our office staff work remotely, everyone returned to the office. We thoughtfully and diligently prepared for everyone’s return, implementing appropriate health and safety protocols reflective of current conditions. In recognition of the continued productivity of our workforce while working remotely throughout the pandemic, office employees have been given the flexibility to balance in-office work with options for remote-work as appropriate. This has proven to be an effective strategy for our return to the office that recognizes the sustained accountability and productivity demonstrated by our personnel throughout 2020 and the first half of 2021.

We also made progress in 2021 on several projects and initiatives to account for, monitor, and reduce our emissions. These projects include Carbon Capture and Sequestration (CCS), Greenhouse Gas Accounting and Carbon Footprinting, and our Noble Gas (or Helium) Project. Freeport LNG is leading the industry as a reliable and environmentally progressive LNG exporter.

As we look forward to what’s ahead in 2022, we are encouraged to see that the global LNG market remains robust, with LNG serving as a critical element in achieving both energy security and decarbonization. Abundant natural gas is the most environmentally friendly fossil fuel, as it burns cleaner than coal and oil, helping to improve environmental conditions relative to alternative fuel sources. Most importantly, U.S. LNG provides the world a stable, flexible and affordable source of critical energy supply. Opportunities abound for Freeport LNG to build on its success as an industry leader, by delivering reliable and sustainable LNG to countries around the globe.

Thank you for your continued interest in Freeport LNG.

Nearly five years ago, the United States was the 17th largest LNG exporting country with only three million tons per annum (mtpa) of exports during the prior calendar year. Today, the United States plays a critical role as the world’s third largest LNG producer with 78 mtpa of production. Moreover, an additional 30 mtpa of new production is under construction, which will make the United States the largest exporting country in just a few years. Rapidly changing dynamics around the reliability of Russian LNG and gas supplies, the United States’ vast natural gas reserves and stable LNG industry is poised to play a critical role in keeping the world’s energy supplies flowing.

Following the temporary demand destruction that resulted from COVID-19 shutdowns, the LNG market is now tight with record LNG prices throughout the world, proving once again that the only certainty about the future is that what we think is going to happen rarely does.

Apart from the Russian invasion of Ukraine, what changed between then and now was the accelerated adoption of international energy transition goals which has seen an increasing amount of capital invested in renewable and natural gas power generation. The Asia Pacific region represents 60% of the world’s population and 75% of the world’s demand for coal. Developing nations in this region are in a delicate situation that requires public policy to balance between socioeconomic growth and clean energy programs. To do this, gas-fired power generation, including LNG-to-Power projects, will play a key part in decarbonizing these countries, not only because it provides affordable energy, but also because natural gas-fired plants ensure stability of the power grid, allowing energy penetration to really take hold.

Nowhere is this more evident than in China, where consumption of LNG has increased in the last five years from 26 mpta to 80 mtpa, making China the world’s largest LNG importer. While it seems unlikely that China’s demand will continue to grow at its current five-year compound annual growth rate of 25%, there is reason to be skeptical that it will slow to the mid-single digit type growth rates that many are forecasting. China has announced plans to increase its import capacity in the next decade with 70 mtpa of new regasification capacity already under construction. Given the ongoing energy transition in China, including increased electrical vehicle usage, it is quite clear that Chinese LNG demand is going to be very robust for the foreseeable future.

The bigger question, then, is from where is all of the LNG needed to meet this growing demand going to come? With significant questions surrounding the availability and reliability of Russian supply, limited new investments in LNG production in the last several years, and delays and turmoil impacting some projects in development, prior concerns of LNG oversupply have now turned to fears of significant market shortages. Whether the Qatari expansion is the announced 32 mtpa or the rumored larger expansion of 42 mtpa (which wouldn’t be fully on line until the end of this decade), demand growth forecasts are outstripping known supply growth handily, geopolitical concerns have come to the fore, and the energy transition has accelerated the need for more clean natural gas; all of this means that a lot more LNG than just Qatari volumes is needed.

A significant portion of this LNG will come from the United States, which has some of the lowest priced gas and most flexible terms in the world. With an ability to consistently deliver the most competitively priced LNG into Asia, the United States uniquely offers an affordable and stable energy solution that benefits our trade partners by putting downward pressure on global gas prices—something they would definitely appreciate today as prices for LNG into Asia and Europe punch above $50/MMBtu and will likely stay in the double digits for the next several years. U.S. LNG can play a key role in the global LNG marketplace to help moderate these prices and stabilize geopolitical dynamics, especially for those that sign up to long term offtake from the United States.

Given that so much of the global LNG demand growth is and will continue to be energy transition driven, the Freeport LNG plant was strategically designed to be one of the most cost-effective suppliers of low-carbon-intensity LNG in the market. Our best-in-class electric motor technology reduces greenhouse gas emissions by 90% versus traditional gas turbine-driven liquefaction. No other large-scale electric liquefaction plant is operating in the United States. Moreover, our electricity is sourced from the Texas ERCOT electricity system, which is ahead of the national curve when it comes to adopting renewable sources of power generation. In 2021, 38% of the electricity generated in Texas was reported by ERCOT to have been powered by wind, solar and nuclear generation —more than twice the U.S. national average – and that continues to grow.

The U.S. LNG industry will continue to grow to meet the needs of an ever-greening and ever more complex world. Natural gas is the cleanest way to power the world’s growing energy needs while nonetheless remediating carbon emissions. Freeport LNG stands ready as a proven, efficient, safe, reliable and environmentally responsible operator to serve the world’s LNG demands both through our current production and our planned expansion.

OUR SAFETY PERFORMANCE

Freeport LNG’s safety performance remains ranked in the top quartile in our industry. In 2021, we achieved 13 years without an employee recordable incident. The discipline and dedication that resulted in achieving this milestone is what drives our operations. No Compromises. No Exceptions.

OUR SAFETY CULTURE

Maintaining our strong safety culture requires discipline, vigilance, and dedication by our employees. They are the driving force behind our successes through the years. Our safety standards and protocols align with regulatory requirements established by the Occupational Health and Safety Administration (OSHA) and the Pipeline and Hazardous Materials Safety Administration (PHMSA).

TRAINING AND PROTOCOLS

The strength of our safety culture is due in large part to the communication, guidance, and training that we provide employees. From Emergency Response to general safety protocols and procedures, we are committed to empowering our employees with the tools they need to be successful.

EMERGENCY RESPONSE

Our robust approach includes several key factors that assist us in our ability to successfully manage emergency incidents. Elements of our Emergency Response protocols include:

• Incipient Fire Training for Freeport LNG Operations and Maintenance Personnel; Industrial Fire Extinguisher, Wheeled Carts, Hydrants, Hydrant Monitors, and Foam Stations
• Haz-Mat Training for Freeport LNG Operations Personnel
• Confined Space / High Angle Rescue Training for Freeport LNG Emergency Response Team
• Attendance at Texas A&M Fire School for Freeport LNG Operations Personnel

GENERAL EMPLOYEE SAFETY TRAINING

We provide an array of safety training for our employees that spans both hands-on and Computer Based Training (CBT). Our employee training covers topics that include but are not limited to:

• Hazard Communication to all employees
• Hot Work Permit to Operations, Maintenance & Support Teams
• Confined Space Entry to Operations, Maintenance & Support Teams
• Scaffold User to Operations, Maintenance & Support Teams
• Job Safety Analysis to Operations, Maintenance & Support Teams
• Electrical Safe work practices to non-qualified worker

2021 Covid-19 Response

Even though we all hoped we would see the end of the pandemic in 2021, it continued to test the resolve of companies, communities, institutions and societies around the globe. Freeport LNG’s vigilance in protecting the health and safety of its workforce was unwavering. We maintained regular meetings of our pandemic committee that we established in 2020. To prepare for our employees’ June return to our offices, after more than a year of remote work, we established several health and safety protocols. In addition to masking protocols, signage was posted across our offices, noting reminders to maintain social distancing and proper hygiene practices. We also established protocols related to office meeting spaces and employee gatherings.

We strive to be a model employer. We believe employees should work under safe, healthy, respectful and fair conditions. We implement strategies that encourage and leverage the unique contributions of employees with diverse backgrounds, while also giving them opportunities to learn and grow. This builds a collaborative culture that upholds the principles that define us as a company and drive our actions.

Talent Attraction and Retention

We value the diverse strengths of our employees who each bring their unique skills and experience to our team. As part of the Freeport LNG team, employees work side by side with top performers in the LNG industry.

We believe that when employees are fairly compensated, work in a safe environment, and are provided excellent benefits, they have peace of mind.

We dedicate ourselves to developing our employees; preparing them for the next level or opportunity. When we must look outside of our workforce for talent, we offer referral bonuses to employees for referring highly qualified candidates.

Lifestyle and Benefits

To support our employees and their families, we provide a highly competitive compensation and benefits package. When employees know that their loved ones are cared for, they incur less stress and perform better.

We encourage our employees and their families to live an active and healthy lifestyle. Incentives include a reimbursement for memberships to fitness centers and classes, annual health assessments, and online educational resources related to health and nutrition.

Leadership Development

Continuous leadership development is a crucial factor for an organization to deliver optimal results; at no time does an individual stop learning. Given the rapid growth of our company and transition from construction to operations, we’ve been keen to make sure all of our growing leaders are getting the training and skills they need. Thus in 2021, we created the ENGage Executive Leadership Program and Leadership Lab. Roughly 30% of our workforce participated in these programs.

The Leadership Lab Program is an ongoing initiative for our workforce as we continue to develop our future leaders.

Employee Engagement

Employee engagement is a key tenet of our organization. We conduct a monthly safety and communications meeting at both our terminal and headquarters locations that are open to all employees. Our CEO issues quarterly updates to all employees, and we maintain a well-updated website. We also conduct regular lunch and learns around IT, cybersecurity, and other topics and make significant additional employee investments in safety awards, employee accomplishments, training, etc.

Building on our existing employee engagement activities, in 2021, we launched FLNG 101, a speaker series held across our organization. The monthly sessions educated our employees on a variety of topics including our corporate structure and the inner-workings of our commercial and marketing organizations.

Freeport LNG’s CEO Michael Smith was featured in one FLNG 101 session in a Q&A format, which gave employees the opportunity to ask Michael questions about everything from the state of our business, the LNG markets as a whole and lighter topics like his favorite places to travel.

We look forward to continuing all of our employee engagement activities in 2022 and beyond, bolstering our commitment to involving and educating our employees on key organizational events, initiatives and milestones.

Workforce Training

Freeport LNG believes that a well-trained workforce sets us up for limitless success. We provide our employees with the tools and support necessary to achieve success. Through a combination of work assignments, on-the-job experiences, and focused training and education, employees acquire the necessary skills and competencies to take on increasing levels of responsibility and job complexity.

We fund employees’ post-secondary educational goals up through the Master’s Degree level; fund external professional certifications, and continuing education requirements to support those certifications. We encourage attendance at professional conferences and targeted technical training.

Internally, employees adhere to a strict training schedule that helps to ensure safe, reliable and efficient operations that complies with regulatory requirements and industry best-practices. This training is conducted through hands-on, classroom and online coursework covering a wide variety of topics.

Building a Skilled Workforce

Freeport LNG employs highly qualified individuals and are continually investing in the development of their skill sets. Through a combination of work assignments, on-the-job training, training simulation, professional development, and focused continuing education, employees perform their work competently and safely, and continuously acquire and hone necessary skills and competencies.

Trainings

Identifying and managing business and financial risks and opportunities presented by the impacts of climate change is critical to the success of our business. Capitalizing on the opportunities to provide clean energy solutions, for the betterment of our society and the world as a whole, takes a focused and disciplined approach to identifying, managing and mitigating risks to our business presented by climate change. In 2017, The Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD) established recommendations for voluntary climate-related reporting, including with respect to governance, strategy, risk management and metrics. Freeport LNG has voluntarily implemented many of the TCFD disclosure recommendations.

The TCFD recommends outlining potential climate risks into categories that affect our industry. The TCFD divides climate risks into two major categories: (1) physical risks – those related to the physical impacts of climate change; and (2) transition risks – those related to the transition to a lower carbon economy. Transition risk is further divided into four categories: policy and legal risk; technology risk; market risk; and reputation risk. Physical risk is divided into acute and chronic risk.

In the tables below, we have identified potential climate related physical and transition risks affecting our business, potential opportunities presented by climate change, and descriptions of the potential financial impacts for each. We continually identify and monitor these and other evolving risks and opportunities through our Enterprise Risk Management and ESG committees.

Climate protection is a foundational tenet of our business. Our liquefaction facility is the largest all-electric motor-driven LNG production plant in the world, and the only one in the United States. The LNG we deliver is the most environmentally sustainable of any LNG produced today.

Worldwide, coal serves as the primary power generation source of electricity, despite its high carbon emissions intensity. According to the United Nations, the global population is projected to grow to over 8.5 billion people by 2030, nearly a 700 million person increase over 2021.^[1] As the standards of living among growing populations improve, ever-increasing energy resources will be required to meet their power needs. Freeport LNG is uniquely positioned to meet the challenges of the growing global energy economy, providing an environmentally responsible alternative to the deployment of more coal and other dirtier fuels to meet increasing power generation needs.

Our use of electric motors allows us to reduce associated plant emissions by over 90% relative to the typical natural gas-fired LNG plant. This not only safeguards the air in our communities, it also enables us to produce LNG with significantly lower carbon intensity relative to our competitors.

In addition, our use of electric motors allows Freeport LNG to take advantage of its location in one of the most diverse renewable power generation markets in the United States. In 2021, wind, solar and nuclear power comprised approximately 38% of the electricity generated on the Electric Reliability Council of Texas (ERCOT) grid^[2], representing twice the U.S. national average. As the renewable share of ERCOT generating capacity continues to grow over the coming years, this will further reduce the carbon intensity of LNG produced at the Freeport LNG facility, and enhance the already significant environmental benefits associated with the LNG we deliver.

In order to further capitalize on the unique environmental benefits of our low-carbon LNG, efficient operations are top of mind. As we continually optimize our facilities to maximize LNG production, we drive down the per-unit environmental impact of the energy we deliver. The more volumes Freeport LNG places in the global market, the greater our contribution to the critical transition from coal and other dirty fuels to a clean energy source with less waste and fewer global emissions.

The competitive strength of our low-carbon LNG allows us to take advantage of growing market demand for sustainable LNG supplies, and furthers the already substantial environmental benefits inherent in LNG’s displacement of coal-fired electric generation in China, India and other developing regions around the world. We are heavily engaged in marketing our low-carbon LNG. Low-carbon LNG’s growth in global importance also presents additional opportunities to further reduce lifecycle emissions associated with LNG, including with respect to enhanced carbon efficiency in gas supplies and in LNG shipping. This is being further buttressed by our work with Talos Energy to develop carbon capture and sequestration capabilities at our site.

As we transition to a carbon neutral global economy, the world has an opportunity to lower its carbon footprint with energy technology that’s readily available today in the form of LNG. Freeport LNG stands uniquely ready to support this long-term transition, by providing some of the lowest carbon-intensity LNG available in the world.

In order to maintain our operations, service our customers and generate revenue, we comply with strict local, state and federal regulatory requirements that govern our emissions, waste disposal, facilities maintenance, and overall environmental management; failing to comply with these requirements exposes our business to financial penalties and forced shut-downs. While adherence to these regulatory limits has a direct and material impact on our business, we go above and beyond these requirements in many respects. We realize that environmental stewardship – both locally and globally – is paramount to the long-term sustainable success of our business and strive to minimize the environmental footprint of our operations, whilst nonetheless delivering the critical clean energy the world needs.

The energy transition is not a future concept – it is occurring now. The strategies that policy makers and private industry alike put in place will be the ultimate determinant of the success of this transition. As we’ve seen through the last several months, though, a sustainable energy transition cannot simply be through having a lower carbon footprint. It’s success also needs to maintain readily available, secure, affordable and flexible energy supply. Long-term environmental stewardship is crucial, but people around the world still need their homes heated in winter and cooled in summer, and businesses need energy to operate to keep people employed. As global wealth grows and more people in developing regions enter the middle class, there are more and more people that simply need access to sustainable energy. There is simply no better tool to meet these critical environmental and social objectives than natural gas. Freeport LNG is poised to play a leading role in meeting all of these needs, and our strategies were established to keep advancing the ball on the sustainability of our product offering.

We are constantly striving to be at the forefront of making already clean LNG produced at our facility even cleaner. Our electric drive motors position us as leaders in our industry, with currently the lowest emissions intensity LNG production globally; but we’re not satisfied simply stopping there. In 2021, we entered into a letter of intent with Talos Energy to develop carbon capture and sequestration at our pre-treatment site (this is further detailed later). Combined with the incredibly high renewable penetration in Texas’ ERCOT electric grid, our exploration of carbon capture and sequestration, Responsibly Sourced Gas alternatives for feed gas sourcing, and other facility optimizations, we are well positioned to remain amongst the absolute best–of-the-best in offering low-carbon LNG.

As a largely tolling facility, we do not control the incoming gas flows and power consumption for the majority of the LNG we produce. However, through cooperation and transparency with our customers, we help them to have clarity and, wherever possible, we work to lower the carbon footprint of the LNG they receive. We offer our customers the ability to procure their own power if they wish, enabling some to contract for fully renewable power supply to the facility. We’re also responding to customer requests for carbon intensity certification for our LNG, which will be done in accordance with GIIGNL approved processes starting in 2022. For the portion of our production where we do control the gas purchases and power consumption, we have contracted some Responsibly Sourced Gas to lower the emissions intensity of our feed gas supply and are exploring both short- and long-term renewable power options.

We live in the community where we operate. Measurement of emissions and detection of potential issues is a paramount focus. In 2021, we undertook a detailed gap analysis to assess our full emissions footprint in order to address potential gaps both in measurement and emissions control. We worked with outside environmental consultant ERM to perform this analysis and have now been implementing their recommendations as we move towards the next phases of the project – with third party verification of our emissions.

Though a private company, we have always been transparent with our key individual stakeholders. We are proud of our leadership position in the energy transition and want to use our data and success to promote both ourselves and our industry – LNG is the fuel that will provide energy to the energy-hungry growing global middle class and we want to tell that story.

This past year, we took several further steps forward with respect to transparency for all of our stakeholders. With this now being our second annual Sustainability and Community Investment Report, we are continuing to demonstrate our commitment to broadening the understanding of the important environmental benefits of our business. We also continue to work with S&P to independently assess our ESG performance as they continue to monitor our public ESG rating. Additionally, as further detailed herein, we are taking the steps necessary to be able to provide statements around the carbon intensity of our LNG later this year, in line with GIIGNL recommendations.

We are committed to the responsible and proactive management of important ESG impacts, risks and opportunities. This includes a strategic focus on ensuring that our operations are resilient in the global energy transition and deliver lasting value to our customers and stakeholders.

With sustainability as our focus, we continue to support the transition to a lower-carbon future. We are strategically focused on continuous improvement of our environmental, social and governance (ESG) performance and disclosures, and we are advancing several key projects and initiatives that are indicative of our commitment to lessening our carbon footprint across our operations.

In 2021, we continued preparations for the construction of our Noble Gas Project and expect to begin construction in late 2022. The project will extract helium from compressed natural gas returned from liquefaction to our Pretreatment Facility in our boil-off gas (BOG) pipeline. The project will require tie-ins to the existing BOG pipeline, firewater system, nitrogen header, and electric supply at our Pretreatment Facility.

Helium is a finite resource characterized by the United States Department of the Interior as a critical mineral vital to the nation’s security and economic prosperity. Extraction of helium associated with the production and storage of LNG is one of only three ways that helium can be captured. The primary application of domestic helium use is in magnetic resonance imaging machines for medical diagnostics, space exploration, and defense systems. Our Noble Gas Project promotes economic and energy efficiency by capturing a finite resource that would otherwise be lost and putting it to beneficial use.

We have executed a letter of intent (LOI) with Talos Energy to develop a carbon capture and sequestration (CCS) project immediately adjacent to Freeport LNG’s natural gas pretreatment facilities. The LOI enables Talos to assess the feasibility of local sequestration of the PTF acid gas stream, which accounts for approximately one-half of Freeport LNG’s total GHG emissions.

The Freeport LNG CCS project will utilize a Freeport LNG-owned geological sequestration site located less than half a mile from point of capture with up to a 30-year injection term and will permanently sequester CO₂. The project benefits from a dedicated source of CO₂ and a secured injection site in close proximity and, therefore, has limited commercial barriers and a rapid execution timeline assuming an efficient regulatory approval processes. We anticipate the first injection to occur by year-end 2024.

In 2021, we undertook an analysis of our current GHG accounting measurement and management practices relative to developing industry, peer and international best practices in order to identify any gaps in our current methodologies. As a result of that analysis, we have initiated steps to improve our GHG management plan to capture additional items not previously captured in our Corporate GHG inventory accounting.

In conjunction with this initiative, we are nearing completion of a carbon footprinting project to enable issuance of verified statements of GHG intensity and emissions associated with natural gas exported from our facility, following the GHG Protocol Product Accounting and Reporting Standard, in conformance with the MRV and GHG Neutral LNG Framework published by the International Group of Liquefied Natural Gas Importers (GIIGNL) in November 2021.

Front-end engineering and design work for our Marine Barge Terminal Project has been awarded to Kiewit. We intend to seek the regulatory authorizations to construct the project in late-2022, which could enable an early-2025 in-service date. This project will enable LNG bunker barges to lift LNG from our facility for ship-to-ship delivery to LNG-powered seagoing vessels utilizing LNG as a cleaner burning alternative to other marine fuels, thereby directly supporting the reduction of GHG, sulfur, nitrogen oxide and other emissions in maritime transport and furthering Freeport LNG’s overall climate objectives, both regionally and globally.

Operating with a commitment of environmental stewardship means that we have a responsibility to leave the environment in a better condition than how we found it each and every day for the good of our workforce, the communities in which we work and live and the world-at-large.

Keeping environmental preservation top of mind requires us to satisfy stringent regulatory requirements around air emissions, water protection, waste disposal, leak prevention, land management, and other aspects of environmental protection.

Freeport LNG’s operations are regulated by state and federal agencies. We also work closely with local agencies to ensure that we safely and successfully manage our operational footprint in the local community.

As it pertains to state and federal oversight of our operations, the regulatory process starts with the Texas Commission on Environmental Quality (TCEQ). The TCEQ regulates emissions from all of Freeport LNG’s facilities. Freeport LNG holds permits issued by the TCEQ that outline pollutant limits for all emission points. The TCEQ also defines many of our operating parameters.

When it comes to regulating Freeport LNG’s pipelines and underground natural gas storage facility (UGS), we adhere to guidelines set by the Railroad Commission of Texas (RRC). In addition to operating our pipelines within RRC regulations, we also adhere to regulations set forth by the Pipeline Hazardous Materials Safety Administration (PHMSA).

From a federal oversight standpoint, Freeport LNG’s operations are regulated by the Federal Energy Regulatory Commission (FERC). FERC authorizes construction and regulates operation of LNG facilities.

Managing LNG cargoes that arrive at our docks means working with and abiding by regulations set forth by agencies that regulate waterways. Freeport LNG works closely with the U.S. Coast Guard (USCG). The USCG regulates all waterside operations as well as safety and security of the LNG facility under the direction of the Department of Homeland Security.

Rounding out the federal regulatory oversight of our operations, is the Environmental Protection Agency (EPA). The EPA regulates all of the site’s water discharge in the form of storm water and process wastewater.

Knowing the environmental significance of the Quintana area, Freeport LNG took special care in facility design. Not only are there delicate wetlands around our facilities, but the region also has a long history as a commercial shrimping and sport fishing center and lies in North America’s most active flyway for migrating birds. You can see our commitment in the way we operate. Our goal is to ensure that our operations maintain the ecosystem and enhance the environment around us.

Our environmental stewardship began as the company initiated site selection, engineering, and permitting of the original LNG import project. This commitment has become a hallmark of how we construct and operate our facilities.

When it comes to conservancy, we seek to increase the quality and scope for each type of wetland that we may impact and to preserve or create new habitats for coastal fish and wildlife species. Freeport LNG has donated nearly 350 acres of land containing various types of habitat to conservation groups and manages another 35 acres of created wetlands at and around our facilities on Quintana Island. These areas host a variety of shore and wading birds, including roseate spoonbills, gulls, avocets, stilts, and many others.

Managing Effluents

Managing the discharge of liquid waste in all of its forms is a vital part of our environmental stewardship. We have developed extensive plans and procedures to assess, store, transport, and dispose of effluents including wastewater, storm water, process water, and sanitation wastes.

Freeport LNG has implemented thorough spill prevention control and countermeasures to minimize the likelihood of an effluent breach. However, should a spill occur, we strictly adhere to our control and response measures to help protect the safety of our personnel, community, and environment.

Resource Recycling and Waste Management

Freeport LNG has made a strong commitment to recycling materials at all sites. We have been able to recycle soils, rock, concrete material, and even vegetation. For example, to build up the terminal site, we used dredged material and soil from our marine-berth area, which avoided hauling fill material to the site and reduced traffic on the island. Sand obtained from the dry excavation of the marine basin was separated and used for padding the pipeline trench during pipeline construction. We also used material that was excavated during the construction of our barge dock to create new wetland areas along the Intracoastal Waterway.

Boil-off gas created while the LNG facility is operating is not vented or flared but recovered and sent via pipeline to the pretreatment facility where it is used as fuel for a gas turbine power generator and fired heaters. Freeport LNG employs advanced recycling methods to capture waste heat from the generator and applies it to regenerate materials used in the gas pretreatment processes.

At our facilities, we follow waste-minimization plans and waste storage and labeling procedures. A qualified and licensed third-party has been contracted to collect, transport, and properly dispose of our hazardous and non-hazardous waste and to assemble data about those collections to prepare for submittal to the appropriate regulatory agencies.

Success at Freeport LNG depends on our ability to meet our stakeholders’ expectations without risk to the community, the environment, our employees and our business. In fact, not only do we commit to responsible operations, but we work positively to impact the local community. At the heart of this success is the distinctive culture that drives our workplace and differentiates us in our industry.

Freeport LNG works closely with local communities where we operate to help support their needs and earn their trust. We collaborate with stakeholders, elected officials and community leaders to invest in programs that promote local economic growth and improve social conditions. We hold memberships in local business and industry organizations, supporting them through the time and talents of our employees. Over the years, we have built a reputation as a credible, accountable, generous and trustworthy neighbor.

Local Stakeholder Engagement and Access to Information

Freeport LNG makes good faith efforts to notify all affected stakeholders regarding project activities, including landowners, towns and communities, and local, state, and federal governments and agencies involved in a proposed activity.

To better communicate with stakeholders and members of the community, Freeport LNG maintains a website (www.freeportlng.com) where up-to-date relevant information about construction and ongoing operations is provided. Additionally, important safety information is also available on this website. Any organization or member of the public can express their views, comments or grievances at any time to Freeport LNG directly by utilizing the “contact us” feature on the website or by contacting us toll free at 1-800-303-6545. Freeport LNG also mails out relevant information to affected landowners during various stages of new development projects.

Should a member of the public wish to file a comment or grievance with FERC directly, they can do so through the FERC eComment feature on their website https://ferconline.ferc.gov/FERCOnline.aspx .

Key Stakeholder Engagements

Public Presentations: We maintain relationships with numerous stakeholders and organizations to try to address the community’s concerns and needs. Examples of engagement include:

• Conducting one-on-one briefings throughout a project cycle with elected officials of all levels of government;
• Making presentations at local city council meetings;
• Delivering public presentations to local economic development organizations, chambers of commerce, business organizations, trade organizations, and civic organizations such as Rotary International;
• Conducting informational briefings with local public school districts and Brazosport College;
• Holding open houses and meet-and-greets, where information is shared about our company and relevant projects; and
• Visiting near-neighbor Home Owners’ Associations to provide updates on project advances.

Community Advisory Council

Freeport LNG is a member of the Brazosport Community Advisory Council (CAP). The CAP is made up of 8 local industrial facilities and a diverse group of community citizens. The panel meets every other month and provides a forum for candid conversation about industry-related issues of community interest or concern, key projects and safety and environmental performance. Open, honest dialogue makes industry members aware of what the community expects of us and helps community members understand what industry members produce and how they operate. The primary issues we address are the facilities’ operations, environmental concerns, safety, security, emergency preparedness and quality of life issues, including industry involvement in the community.

We continue to seek different platforms to engage with each stakeholder group to receive feedback on key issues as it pertains to our business.

Creating dialogue with our stakeholders has given us valuable insight into the issues that face our community, company and industry. It gives us insight into needs and expectations. We have leveraged the feedback from stakeholders to assess how the company is allocating resources to ensure the most effective and impactful sustainability performance.

Stakeholder Feedback

We value all input from the community but when we receive a question or concern from a stakeholder, it is our desire to respond as quickly as possible so the matter can be properly and promptly addressed. First, our Public Information Officer receives notification and registers the issue along with the concerned party’s contact information. We then respond to that stakeholder to confirm that their comment was received and that we are looking into the matter. Third, we route the matter to the proper department or individual or, if needed, escalate the issue to senior management. The Public Information Officer will then monitor progress toward resolution of the matter, and communicate a proposed resolution to the stakeholder or seek additional feedback as needed. Our hope is to successfully resolve all matters. If an issue remains unresolved, we will continue to monitor the situation for possible future action.

Respect for Indigenous Peoples and Cultural Preservation

We respect indigenous peoples and aim to preserve the culture of indigenous communities near our operations. During our permitting processes, we notify federally recognized Native American Indian tribes that have potential interest in the general area where Freeport LNG’s facilities are to be built for our planned activities. Additionally, Freeport LNG maintains an Unanticipated Discoveries Plan that includes a provision to contact Native American Tribes, if warranted.

Freeport LNG sends information to these Native American Tribes to provide an opportunity for them to review and comment on proposed developments. They can report a grievance at any time to Freeport LNG by utilizing the “contact us” feature available on our website (www.freeportlng.com) and to FERC through direct government-to-government coordination or the eComment feature on their website https://ferconline.ferc.gov/FERCOnline.aspx .

Contributing to the communities where we live and work is a top priority for Freeport LNG. We are honored to donate time, money, and resources to worthy causes that improve the lives of our employees, their families, and their neighbors.

To guide our social investment activities, Freeport LNG developed a Corporate Citizenship Roadmap providing priorities for Corporate Citizenship and Philanthropic activities. This strategy is aligned with our corporate objectives and purpose as well as the economic, social and environmental dimensions of sustainable development. Our performance aligns with international standards, including the United Nations Sustainable Development Group (UNSDG) guiding principles. This includes our focus pillars of:

• Education & Workforce Development;
• Public Safety;
• Environment and Wildlife Sustainability;
• Access to Quality Healthcare; and
• Quality of Life.

We provide philanthropic funding and employee volunteerism to support these pillars. This strategy is continually buttressed by our stakeholder engagement efforts that keep us abreast of, and aligned with, community needs and priorities.

In 2021, we invested $1.5 million in our local community through charitable donations and contributions, and made an additional $1.25 million in multi-year pledges.

Freeport LNG commits both time and money to bring these values to life, building a pipeline of talented future candidates of employment with our company and other industrial companies in the area. The ability to hire, develop and promote educated, competent employees allows us to fulfill our objective of maintaining safe, efficient, and cost effective operations, and enhances our ability to effectively grow our company and manage our business.

Freeport LNG invests the largest portion of our charitable funds in the education space, including K-12 future readiness and scholarships for those advancing to the next level in academic or technical trades.

Our signature education programs include the Brazosport College Gator Classic Golf Tournament that raises scholarships for students at Brazosport College, establishment of a scholarship for the benefit of veterans, and support of public school district education foundations, primarily focused on science, technology, engineering and mathematics, and career and technical education.

Freeport LNG is proud to make monetary donations to local fire and EMS departments as part of an annual tradition of giving to various community emergency response organizations. For more than 14 years, we have donated funds for equipment such as patrol boats and SUV’s, beach rescue vehicles, and RADAR guns.

Life Saving Equipment Donated to Lake Jackson Volunteer Fire Department

When Freeport LNG learned that the Lake Jackson Volunteer Fire Department’s (LJVFD) budget had fallen short in its ability to purchase planned life-saving extraction equipment, otherwise known as the “jaws of life”, we were eager to help fill the funding gap. The LJVFD is all volunteer and provides services to our community at no cost, responding to a wide variety of emergency calls in the community as well as providing mutual aid to surrounding communities. The work that these firefighters do requires a great deal of training, and having the right tools for the job makes their work possible when mere seconds count. The extraction tools made possible by Freeport LNG are essential to vehicle extraction: stabilization, cutting and pushing parts of the vehicle away from an entrapped victim. They are hydraulic in nature, however are battery powered, making extraction much quicker. The equipment cost was $35,000, yet is priceless when lives are saved.

On April 10, 2021, the LJVFD held a public demonstration of their newly purchased “jaws of life”. They simulated a real emergency call where a driver was trapped in a vehicle that had rolled over. Attendees were able to witness how emergency responders arrive upon and secure a scene, assess the situation, communicate with each other about how to approach and execute an extraction, and cut the victim out of the vehicle.

Freeport LNG is proud to be able to help local emergency responders secure vital equipment needed so that they can effectively respond to emergency situations in the interest of public safety.

Sheriff’s Department Benefitted by Drones

Freeport LNG provided $25,000 in 2021 toward the Brazoria County Sheriff’s Department creation of a drone program to aid in the protection of citizens, monitor critical infrastructure and waterways within Brazoria County, and provide support and assistance to other agencies. By being able to survey the scene from above, officers are able to assess hazardous situations or damage, and even find missing, injured or stranded citizens. A drone’s aerial view can assist command personnel in their decision-making process.

Beach Patrol and Rescue Vehicle Donated to Surfside Police/EMS Department

Surfside Beach is a highly visited destination very near the Freeport LNG terminal. During the COVID-19 pandemic, Surfside has seen a large increase in the number of people visiting the beach. This increase in visitors brings with it increased concerns for the safety of all. The Surfside Police Department and EMS have historically shared a utility vehicle with the Surfside Maintenance Department, which does not allow for police officers to safely patrol the beach on a daily basis. Freeport LNG donated the funding necessary for the Village of Surfside Beach to purchase a fully equipped utility vehicle to be used for beach patrol and rescue by Surfside Police Department and EMS. This new vehicle will allow both departments to access parts of the beach that were previously difficult to get to, and save critical time in an emergency.

Power generation from natural gas emits 50-60% less carbon dioxide than a typical new coal plant. However, Freeport LNG’s commitment to the environment does not stop there. For example, we have donated nearly 350 acres of undeveloped land containing various types of habitat to conservation groups, and we manage another 35 acres of wetlands we have created at and around our facilities on Quintana Island. These areas host a variety of shore and wading birds, including roseate spoonbills, gulls, avocets, stilts and many others.

The Gulf Coast Bird Observatory’s Neotropical Bird Sanctuary on Quintana Island is a popular site for observing many varieties of migratory birds, featuring walking trails, freshwater ponds and park benches, and is one of the sites for the annual Great Texas Birding Classic. This event draws thousands of visitors to the island each spring. Freeport LNG is an annual sponsor of the Birding Classic, and has donated an observation tower so that visitors could get a variety of views of the migrating birds.

We invest in safe, quality healthcare for the benefit of our employees and their families and for the communities where our employees live and work. Strong, vibrant, thriving, resilient communities are those with the best level of healthcare. Our focus is on access to quality facilities, advancing research, supplying equipment, and training. We also invest in programs that encourage individual and family wellness.

Committing for Life

Freeport LNG employees save lives by participating in quarterly blood drives at Freeport LNG’s worksites. Up to three lives can be saved through a single blood donation. Freeport LNG employees answered the call in 2021 by donating blood in support of one of Freeport’s own, the son of a Freeport LNG employee diagnosed with Leukemia.

Liam’s Journey

By John Doan, Freeport LNG employee and Liam's father

It all started with a daily recurring fever… which for a 2 year old is nothing to be alarmed about, but that everyday symptom gave rise to a two and a half year journey that still has ripple effects today.

On Presidents’ Day, February 18, 2019, my youngest son Liam was diagnosed with ALL (Acute Lymphoblastic Leukemia) at the age of 2 years 3 months.

Needless to say, our lives have not been the same since. Fortunately, throughout our roller coaster of initial grief, small victories, wishful prayers, steely resolve and blind luck, through all the procedures that have no business being done to a 2 year old, my family and I had the utmost support from my Freeport LNG workmates and management.

Freeport LNG was kind enough to give me as much time off as I needed, especially during the critical initial Induction phase, where the goal was to aggressively treat Liam with a regimen of chemotherapy and steroids in order to achieve a Minimal Residual Disease (MRD) level of zero after 29 days.

Fortunately Liam was successful in that goal, which was an important indicator for successful treatment of the disease.

At that point, people asked me if Liam was in “remission” or “cancer free”. Unfortunately the answer to that question was, and technically still is, not that simple. Because leukemia is a blood cell cancer, there are no specific locations that can be targeted where the cancer can be removed; blood is everywhere. The best analogy I’ve heard is that it’s like taking a swimming pool and pouring a glass of orange juice into it, and then trying to make sure the swimming pool is completely free of orange juice. Not a simple task. So that is why the doctors refer to MRD of zero – it means that the amount of cancer is below the threshold of detectability… which could include zero, but also may not.

In the two and a half years of treatment since, Liam endured a battery of blood draws, chemotherapy, blood transfusions, surgeries, side effects and hospital stays. During that time I was always able to take time off, often at short notice, to make sure Liam got the best care possible and that I could be at his side through all the difficulties he endured. Not that he needed that much support actually – he was a superstar in the hospital, never fussing when they needed to put needles and other horrible things in him and very quickly learning how to take his oral medication. He even learned to swallow pills when he was only 4 years old! An incredible feat for an incredible kid.

In addition to my flexible work arrangements, Freeport LNG really stepped up to the plate when our volunteer committee suggested making our company blood drives in Liam’s honor. With Liam as the face of blood donation at Freeport LNG, donations increased significantly with just over 100 units of blood donated in Liam’s honor. Many donors had never donated before and are now regular donors. These donors especially are a lasting legacy to Liam’s cancer journey and just another among many reasons why Freeport LNG is such an incredible company to work for – a company with which I just celebrated my 15 year anniversary, and there is no place I’d rather work and no better group of people with which to spend such a large proportion of my waking hours.

The COVID pandemic actually coincided closely with the beginning of Liam’s Long Term Maintenance phase. Again, thanks to the leadership, care and proactivity of the Freeport LNG Executive Management Team to quickly allow non-frontline workers like me to work from home, I was not only successful in keeping my family COVID free, but also kept Liam free from the other bugs and germs that could have caused him to have to be hospitalized and/or pause his chemotherapy while he was immunocompromised. As a result, Liam was able to experience a textbook LTM phase, which helped give our family some peace of mind that we really couldn’t have made things better for him.

On June 21 2021, Liam took his last oral chemotherapy and soon after on July 6 2021, Liam had his port surgically removed… and he was technically a “normal” kid again. Looking at him now, aside from a few scars on his chest and neck from the port insertion and removal, you could never tell he was as sick as he was. I truly believe that Freeport LNG played a supporting role in helping make that happen. Absolutely, when my world was upside down, work was the last thing on my mind. Just as it should be.

Freeport LNG is stepping up to help ensure that the citizens of Sweeny and surrounding areas continue to be able to access high quality healthcare locally by investing in SCH’s capital campaign at a meaningful level. We donated $250,000 to the campaign, which is an investment in building a healthier community in Sweeny and surrounding cities.

The new hospital building will feature a larger footprint allowing for less cramped and shared spaces, the ability to treat more patients with room for growth, and ease privacy concerns that exist today. It will allow for improved workflow and ADA compliant facilities. More importantly, patient safety will be improved by having the new facility built to all modern building codes.

Our investments in Quality of Life issues are made through our support of the United Way, and charitable donations to a variety of civic, humanitarian and non-profit groups that work to improve the lives of the most vulnerable. This includes the vital work of organizations that focus on closing the inequality gaps of race and gender, support of veterans, historical and cultural preservation, food insecurity, and senior citizen and youth programs.

Many of these organizations focus their work on reduction of poverty through education, income support, economic development, health initiatives and addressing basic needs of individuals and families in the community. When we invest in making lives better, the community is strengthened and so is our company.

Investing In Diversity Initiatives

In support of both our quality of life pillar and our education and workforce development pillar, Freeport LNG is dedicated to investing in and supporting organizations, initiatives and programs that work to ensure that all people have fair and equitable access to education and economic opportunities.

2021 marked the second year of a five-year, $3 million pledge by Freeport LNG to three area organizations that work to support and empower African-Americans and people of color – the MLK Celebration Committee (MLKCC) in Brazoria County, the Houston Area Urban League and My Brother’s Keeper Houston (MBK Houston). Each organization’s $200,000 per year gift will be allocated for scholarship programs and economic empowerment and education initiatives managed by each organization.

Representatives of Freeport LNG supported and attended the "Say Their Names" Memorial put on by the MLKCC, made possible by our donation to the organization. The “Say Their Names” Memorial is a visual display of 200 victims whose lives were lost due to racial injustice. A powerful memorial to provide a space for dialogue, reflection, and give visitors an opportunity to look into the faces of those whose lives were cut short too soon and realize that all lives matter.

Freeport LNG was recognized by the Houston Area Urban League with the Gerald Hines Award as 2021 Business Partner of the Year. This award was presented for Freeport LNG’s leadership and support to increase education, employment, training and economic development opportunities for the underserved.

Hispanic Chamber of Commerce Sister-City Initiative

In 2021, The City of Freeport and the City of Altamira, Tamaulipas, Mexico signed an agreement to become sister cities. This agreement provides the potential for economic and cultural benefits for both cities. Altamira is very similar to Freeport, being a large, commercial port city. This provides opportunities for exchanges of ideas, the sharing of culture, and opportunities for trade. Freeport LNG was asked to make a presentation to a delegation visiting from Altamira, Mexico about our company and its economic impact to the local area and at a national level. Maintenance Manager, Rick Pena, made this presentation to this important delegation. The presentation was the first conducted by our company entirely in Spanish.

Kids Unlimited Offshore Fishing Adventure

Kids Unlimited is dedicated to providing quality life experiences for children afflicted with cancer. One of their most popular events is an offshore fishing trip each summer out of Freeport. Freeport LNG sponsored the 2021 trip for these young anglers, providing them with a fun day of catching the big ones while getting away from the daily struggles of dealing with their cancer.

Christmas for Children

In 2021, Freeport LNG employees conducted a Christmas Toy drive that supported the children of the Tellepson Family YMCA. This was a good opportunity to bring joy to deserving children in such a challenging year. Over 150 toys were donated, benefitting 50 children.

Our employees are passionate about engaging in our community and we encourage them to contribute to the communities where they live and work. This enables our employees to make more meaningful and personally rewarding impacts.

Corporate Matching Program

To further leverage the generosity of our workforce, Freeport LNG provides up to $10,000 of dollar-for-dollar match of an employee’s personal donations to eligible non-profit organizations. This allows employees to double their impact to the organizations that matter most to them. In 2021, this meant over $147,000 in additional investments to deserving non-profits.

United Way Workplace Campaign

United Way provides a strong foundation for investments to strengthen our community and create opportunities for a better life for all. When we give to United Way, we help support community partnerships, collaborations and programs that achieve measurable results in education, income, health and basic needs. When progress is made in these areas, we see permanent change and build a stronger community.

The highlights of our campaign are an online silent auction and our employee golf tournament. The golf tournament had to be suspended in 2021 due to COVID-19, but the auction featured a variety of exciting items and raised nearly $27,000. Despite not being able to hold our annual golf tournament, employees who participated in Freeport LNG’s annual United Way Employee Workplace Campaign raised $348,220 in 2021. Donations to the United Way offer employees a convenient way to make a large impact across a variety of non-profit organizations.

To date, our employees have raised over $1.6 million for United Way programs.

Responding to the Needs of our Neighbors

When Hurricane Ida hit the gulf coast of Louisiana in August 2021, Freeport LNG answered the call to support our neighbors to the east. Freeport LNG and its employees sprang into action to provide relief supplies for those hit hardest by the storm. Donations of bottled water and cleaning supplies were collected and delivered to Louisiana residents.

Freeport LNG maintains a structure of checks and balances that preserves and creates value for our business, and ensures our ability to meet our commitments to our customers and other stakeholders. Our board of managers is comprised of executive leadership, investor representatives and industry experts who oversee our company performance and business operations.

Our corporate governance system is designed to ensure that the company is managed in the interests of its equity investors, including minority investors, and that the board has appropriate control and oversight responsibilities.

Board of Managers

Our board of managers is responsible for risk oversight, including financial, construction and operational risks. The board works to ensure that Freeport LNG conducts its business responsibly and ethically, with a focus on sustainability and strict adherence to all laws and regulations. The board appointment rights in favor of our shareholders ensures the independence of our board, with seven of our eleven board members being independent. The remaining four members of our board are members of the company’s executive leadership. Our board is actively engaged in the management of our business, with near perfect attendance by all of our board members at our quarterly and special board meetings in the past year.

Bios for our current board members are available on our website at www.freeportlng.com.

Audit Committee

Our audit committee oversees accounting and financial reporting processes and the audits of our financial statements. The audit committee is chaired by an independent manager. The audit committee supports adherence to internal controls over financial reporting and encourages continuous improvement and maintenance of open channels of communication among the board, our independent auditor, financial and accounting management, internal audit and legal and compliance functions.

Construction Committee

Our construction committee oversees the permitting, construction and planned operation of projects constructed or proposed to be constructed by Freeport LNG, and advises the board and management of the company on the development and progress of such projects, including project health, safety, and environmental policies and performance, project execution status, project management team resources, project staffing, and EPC contract matters and claims. The construction committee is chaired by an independent manager, and supports adherence to company policies and procedures with respect to health and safety, regulatory and legal compliance, and project execution objectives.

Under our corporate governance structure, the board is directly representative of and accountable to our equity investors, and the short- and long-term interests of our investors and the board are directly aligned. This seamless alignment of interests between our company, its board and its investors, and the direct access that our investors have to company management and information, uniquely positions Freeport LNG to protect investor rights and interests and ensure strong corporate governance.

Oversight

Our ethics and integrity efforts are led by our VP, Government Affairs, Risk and Compliance and our SVP, Chief Human Resources Officer. These senior officers of the company manage and implement our ethics and compliance policies, and work with executive leadership to address concerns that may arise.

Policies

Our codes of conduct apply to all of our employees, and provide the framework for adherence to Freeport LNG’s values of honest and ethical conduct, and having a respectful workplace. Our policies outline our commitment to ethical behavior, timely and accurate reporting, regulatory compliance, and accountability. Our policies are reviewed and updated annually. We also conduct annual compliance and ethics training across our organization, with all applicable employees certifying that they have received, reviewed, understand and agree to adhere to our ethics and compliance policies. Our key policies, include:

• Anti-corruption policy;
• Gifts, favors and entertainment policy;
• Know-your-customer due diligence procedures policy;
• Conflict of interest policy;
• Guidelines for appropriate conduct policy;
• Internet code of conduct policy;
• Prohibition against threats and workplace violence policy;
• Equal employment opportunity policy;
• Anti-retaliation policy; and
• Anti-discrimination and anti-harassment policy.

Our employees completed over 870 hours of compliance and ethics training in 2021, with 100% of applicable employees completing required training.

Our anti-corruption and know-your-customer due diligence policies establish the necessary requirements to comply with applicable anti-corruption, anti-bribery and economic sanctions laws. Our anti-corruption policy prohibits facilitation payments and establishes guidelines for ethical behavior. Our suppliers are required to meet our standards of ethical business conduct, as well as comply with all applicable laws, including labor, health and safety, and environmental laws. During the prequalification process and throughout supplier engagement, we conduct risk assessments of our suppliers on their regulatory compliance and financial stability.

Collectively, our policies support our ability to maintain the highest standards of conduct and ethics among our employees, suppliers and business partners.

Reporting Concerns

If an employee observes a violation of our codes or policies, they have been trained to contact their supervisor, another member of company management, or a human resources representative. Employees may also report concerns confidentially, with the option to remain anonymous, via email or through our employee hotline. Once we receive a report, it is assigned to the appropriate person for investigation. As part of our annual compliance and ethics training, we inform employees on methods to report ethics concerns. Our anti-retaliation policy strictly prohibits any form of retaliation against employees who make good-faith complaints, or report, file, testify, assist, or participate in any manner in any investigation or other proceeding conducted by or with respect to the company. Any personnel involved in retaliation are subject to appropriate disciplinary action, which may include termination of employment.

In addition to implementing robust internal control processes to comply with existing regulations and proactively develop control mechanisms, we emphasize a focus on risk governance and implementation of processes to maintain an effective risk culture.

Risk Governance

Our VP, Government Affairs, Risk & Compliance is generally responsible and accountable for our Enterprise Risk Management (ERM) program, and chairs our risk committee, which is comprised of senior executives and managers from across the organization. The risk committee meets on a quarterly basis to define, review and update the top existing and emerging risks to the organization. Once defined, risks are assigned to risk owners, and measured based on probability and severity. Risk mitigants are detailed and those mitigants are updated regularly. Annually, our VP, Government Affairs, Risk & Compliance briefs the board regarding the status of the company’s ERM program and top risks. Internal Audit periodically audits the entire ERM program process and reports findings to the Audit Committee.

Sensitivity Analysis and Stress Testing

We conduct comprehensive scenario analysis and stress testing. The risk committee evaluates top risks of the organization, and conducts stress testing or sensitivity analyses on selected top risks annually. Analysis and testing is performed at the functional department level, where deep subject matter knowledge can drive thorough consideration of specific risks, various potential events and outcomes, and scenario evaluation. Results of these exercises are presented to the risk committee, and included in the reports to the board.

Risk Culture

In order to promote and enhance an effective risk culture, company goals and compensation are tied to certain risk mitigants, including safety performance. In addition, the ERM process provides members of the risk committee with training on risk management principles and processes, and encourages promotion by those managers of an effective risk culture across the organization. Our personnel are trained to report potential risks to supervisors, senior management, or confidentially via our employee hotline. Our anti-retaliation policy strictly prohibits any form of retaliation against employees who make good-faith reports of potential risks.

LNG exports from Freeport LNG offer an opportunity to play a key role in the global transition to cleaner, less carbon-intensive energy sources. This compels our board and executive leadership to clearly articulate and execute upon strategies for managing such risks and capitalizing on such opportunities.

Oversight of sustainability is formally integrated into our governance structure, with established executive and board oversight of sustainability and social-responsibility issues. Our SVP & Chief Legal Officer chairs our ESG committee comprised of Freeport LNG personnel with relevant subject matter expertise from across the organization. The chair of the ESG committee liaises with the board regarding ESG risks and opportunities impacting our business, and our efforts to manage and address them.

Our supply chain management strategy is to access industry leading and innovative solutions that reduce cost, add value, while uncompromisingly supporting our safety, ethics, and business controls. Our procurement efforts prioritize local suppliers, provided they are able to supply competitive and quality goods and services, while meeting our high performance standards. In addition to requiring that our suppliers commit to our standards for environmental protection, health and safety, regulatory compliance, cybersecurity, and insurance, we identify and actively manage the performance of our critical suppliers.

Awareness

Critical suppliers are those who provide products or solutions that are not easily substitutable, and the loss of which could result in significant adverse impact to our operations. We currently rank our critical suppliers into three categories: (1) those with respect to which supply chain failure could result in suspension of operations; (2) those with respect to which supply chain failure could disrupt operations, though not resulting in significant interruption of operations; and (3) those for which there are no practical substitutes.

Risk Exposure and Management

In evaluating supplier conduct, we place particular focus on compliance with health and safety protocols and insurance requirements. As part of the supplier onboarding process, all suppliers performing services at our operating facilities must attend a safety orientation in which they are familiarized with Freeport LNG’s health, safety, and environmental policies and procedures. Additionally, all suppliers performing risk-based services at our operational facilities must be qualified through a third party that reviews and certifies a supplier’s safety track record. This safety compliance is then monitored on a continual basis following onboarding to ensure continued compliance. We also use a third party service to verify compliance with insurance requirements, both at onboarding and the full term of the supplier service. We also perform in-person risk review, including site visits if appropriate, with selected suppliers when quality issues or other important service issues are identified.

Organizations, large and small, have had their operations impacted by a range of breaches. At Freeport LNG, we take an aggressive approach towards cybersecurity, working daily to mitigate and manage threats and risks in order to maintain business continuity and prevent reputational harm.

Governance

Incremental improvements to Freeport LNG’s robust cybersecurity program continued to be made in 2021. These efforts have been primarily centered around enhancement of our detection and response solutions, hardening of cybersecurity vendor solutions, procedure refinement, risk measurement, microsegmentation, and disaster recovery. Specific initiatives for 2022 include:

• Department of Homeland Security (DHS) Red Team Assessment
• Additional cybersecurity awareness training
• Review of several next generation security solutions
• Enhanced change management and task workflows

In the year ahead, we look forward to building on all of our cybersecurity efforts, and bolstering our existing commitment to mitigating and managing cybersecurity risks.

Freeport LNG advocates for appropriate representation in legislative, political and public discourse in a manner that protects our interests and maintains the integrity of our business.

Our legal department organizes and manages government advocacy efforts pertinent to our business and public policy interests. Led by our VP, Government Affairs, Risk & Compliance, we develop and advocate policy positions through our participation in trade associations and partnerships, and engagement with federal, state and local government officials. All of our employees are expected to maintain the highest standards of ethical behavior in conducting any political advocacy, and to maintain full compliance with applicable laws and company policies. The board is provided regular updates regarding our governmental affairs advocacy.

Freeport LNG prioritizes engagement with industry, trade and business associations. Our participation in these organizations allows us to provide insight and expertise on policy and regulatory issues that affect our industry, business and operations. Major associations of which we are members include Natural Gas Supply Association/Center for LNG, National Association of Manufacturers, Texas Association of Manufacturers, Texas Oil & Gas Association, Texas Pipeline Association, and Texas Civil Justice League. In 2021, we incurred expenditures of

nearly $166,000 toward our membership with these trade associations.

Political Contributions

Freeport LNG does not have a political action committee or use company funds or assets make direct political contributions.

Lobbying

We engage with policymakers and advocate for policies, rules and legislation in the United States that support our strategic business objectives and promote the success of our organization. We comply with all regulatory standards associated with any political engagement activity. In 2021, we incurred expenditures of over $435,000 with external state and federal lobbyists.

Natural gas is the most environmentally friendly fossil fuel, burning cleaner than coal and oil, improving air quality and providing grid stability wherever used. In many emerging markets, it serves as a cost-effective cleaner alternative to coal that can provide all of the energy these economies need to grow. In more developed markets with substantial renewal power generation, natural gas-fired power plants are the backbone of the grid, providing reliability when there is intermittency with renewables, and ensuring that critical energy is delivered when needed.

Emerging market countries are in a delicate situation that requires public policy to balance the power generation needs of socioeconomic growth with clean energy programs that support global decarbonization. To do this, gas-fired power generation through LNG-to-Power projects will play a fundamental role. Growing wealth and urbanization in the developing world will push electricity demand to new heights in emerging market countries. These countries, and the cities growing inside their borders, are starting from a low degree of energy penetration that will need to increase at a very significant pace in order to satisfy the evolving and increasing energy needs of their citizenry. At the same time, these populations will be seeking cleaner air and less emissions. This is a combination that can only be delivered through expansive adoption of LNG.

Fast reacting natural gas fired generation serves as an excellent complement to the growing renewable component of every country’s power grid.

The ability to deploy natural gas fired generation quickly and on a highly variable basis supports the irregular daily power demand curve associated with renewable power generation and will serve as a catalyst for the build-out of solar and wind generation.

This demand-load curve associated with solar power typifies the need for a base load non-renewable power resource that can be dispatched rapidly. Power grid operators will appreciate the value of power/generator flexibility in the absence of economic electricity storage when it comes to properly pairing natural gas with renewable generation. All the while, power customers will of course be thankful for the enhanced grid reliability of such a complimentary dichotomy. (Source: Interstate Natural Gas Association of America, and Resources for the Future)

Being an innovator and a leader in the LNG export business means being at the forefront of global efforts to transition to a lower-carbon future. At the very heart of our advances on this front are our employees, who contribute their time, experience, and dedication to our continued success. We look forward to sharing in this report each year more of what makes Freeport LNG a recognized industry leader and an organization that is safely and responsibly taking U.S. Gas Global.

(1) Conversion factor of .293071 MWh per MMBtu to convert the fuel from MMBtu to MWh units.
(2) split between renewable and non-renewable based upon proportionality of ERCOT grid. This is then applied to calculate our indirect emissions.

Freeport LNG Verification Opinion

2021 GHG Stage Statement Summary Memorandum - Revised Nov 2022

Freeport LNG - LNG Carbon Intensity Stage Statement

GHG Emissions Stage Statement Without Scope 2 - CY2021

I. FORWARD-LOOKING STATEMENTS

This report contains “forward-looking statements,” as that term is defined in Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. Such forward-looking statements are only predictions and are not guarantees of future performance. Readers of this report are cautioned that any such forward-looking statements are and will be, as the case may be, subject to many risks, uncertainties and factors relating to the operations and business of Freeport LNG that may cause actual results to be materially different from any future results expressed or implied in such forward-looking statements. Freeport LNG does not undertake, and expressly disclaims, a duty to update any of the forward-looking statements, which speak only for the date they are made.

II. NO REPRESENTATION OR WARRANTY

No representation or warranty, either express or implied, is made by Freeport LNG as to the accuracy, fairness, or completeness of the information presented in this report and no reliance should be placed on the accuracy, fairness, or completeness of such information. Freeport LNG undertakes no responsibility or liability to update the contents of this report in the light of new information and/or future events.

Descriptions of Freeport LNG’s various operational and compliance standards, practices, policies, procedures, and similar measures included in this report are for information purposes only, and do not constitute a guarantee or assurance as to their effectiveness, or that such measures will be universally applied. Implementation of alternative standards, practices, policies, procedures and similar measures in specific instances may be necessitated by particular facts and circumstances.

III. THIRD-PARTY INFORMATION

Some information used in this report was obtained from internal surveys, market research, publicly available information and industry publications. Although Freeport LNG has no reason to believe that any such information is inaccurate in any material respect, it has not independently verified data provided by third parties or by industry or other publications and therefore does not make any representation as to the accuracy of such information. Links to third-party websites are for readers’ convenience and information only, and Freeport LNG is not responsible for such websites or the contents therein.

IV. NO EXTERNAL AUDIT OR ASSURANCE

Neither this report nor the data presented in it have been externally audited, assured, attested or verified.