Cheniere Energy Partners, L.P.

Please stand by. We are about to begin. Good day and welcome to the Chenier Energy second quarter 2024 earnings call and webcast. Today's conference is being recorded. At this time, I'd like to turn the conference over to Randy Boutier, Vice President of Investor Relations. Please go ahead, sir.

Thanks, operator. Good morning, everyone, and welcome to Chenier's second quarter 2024 earnings conference call. The fly presentation and access to the webcast for today's call are available at Chenier.com. Joining me this morning are Jack Fusco, Chenier's President and CEO, Anna Fulfagan, Executive Vice President and Chief Commercial Officer, Zach Davis, Executive Vice President and CFO, and other members of Chenier Senior Management. Before we begin, I would like to remind all listeners that our remarks, including answers to your questions, may contain forward-looking statements. and actual results could differ materially from what is described in these statements. Slide two of our presentation contains a discussion of those forward-looking statements and associated risks. In addition, we may include references to certain non-GAAP financial measures, such as consolidated adjusted EBITDA and distributable cash flow. A reconciliation to these measures for the most comparable GAAP measure can be found in the appendix to the slide presentation. As part of our discussion of Chenier's results, today's call may also include selected financial information and results for Chenier Energy Partners LP or CQP. We do not intend to cover CQP's results separately from those of Chenier Energy Inc. The call agenda is shown on slide three. Jack will begin with operating and financial highlights. Anatole will then provide an update on the LNG market, and Zach will review our financial results and increase 2024 guidance. After prepared remarks, we will open the call for Q&A. I'll now turn the call over to Jack Fusco, Cheniere's President and CEO.

Thank you, Randy. Good morning, everyone. Thanks for joining us today as we review our second quarter results, which exceeded our expectations thanks to the success we have achieved across the entire Cheniere platform. Before I address the quarterly results and guidance increase, I hope you saw our contract announcement earlier this week. we have entered into a new long-term SBA with the Portuguese multinational integrated energy company, GELP, for approximately half a million tons for 20 years. And the SBA is tied to the date of the second train of the SPL expansion project. This contract demonstrates not only further progress and continued momentum on the development of the SPL expansion project, but also the important role US LNG fulfills in the European energy system for decades to come. The SPA represents our longest-dated contract with the European counterparty, as the deal is expected to extend beyond 2050. We continue to be very excited about the market's response to the SPL expansion project and are working diligently across multiple work streams to advance the project towards FID. we're focused on being the world's LNG supplier of choice from the US, differentiating ourselves with a safety-first culture, superior reliability, and a customer focus that demonstrates our long-term commitment to excellence in LNG operations. Please turn to slide five, where I'll highlight our key accomplishments for the quarter and introduce our increased guidance for 2024. In the second quarter, we generated consolidated adjusted EBITDA of approximately $1.3 billion, distributable cash flow of approximately $700 million, and net income of approximately $880 million. These excellent financial results are once again the product of our maniacal focus on operational excellence. During the quarter, we produced and exported 155 LNG cargoes from our facilities. Total LNG production across our platform was up slightly year over year for both the quarter and the first half of the year. On the maintenance front, during the second quarter, we executed our major maintenance programs at both Sabine Pass and Corpus Christi, and I'm extremely proud of the outcomes of each of those turnarounds. I'll come back to these programs in a minute, but their safe and successful execution further reinforces our operating track record and sets Chenier further apart from the competition. During the second quarter, we announced an update to our capital allocation plan highlighted by a $4 billion increase in our share repurchase authorization through 2027, as well as a planned increase in our dividend to $2 per share annualized next quarter. As Zach will speak to further, our capital allocation plan provides investors with an excellent framework in which they can take confidence, a proven, disciplined approach, that provides for cash flow visibility, capital management, and long-term value creation. Looking ahead to the balance of 2024, today we are raising and tightening the ranges of our full year guidance to $5.7 to $6.1 billion in consolidated adjusted EBITDA and $3.1 to $3.5 billion of distributable cash flow. The primary drivers of the increase are portfolio optimization activities and excellent maintenance execution at both our sites, particularly at Corpus, where we expect to make up some of the lost production we had in the first quarter as a result of freeze-related gas composition issues that I discussed on our last call. Even accounting for the increased volume in the forecast, we continue to have an immaterial amount of unsold volume remaining for the balance of the year. will have more to say on the guidance increase in his remarks in a few minutes. Please turn to slide six, where I'll update you on the growth at Stage 3 and Trains 8 and 9 at Corpus. On the construction execution side, Bechtel continues to progress our Stage 3 project at Corpus Christi on budget and on an accelerated schedule, once again demonstrating to the LNG market the reliability of execution and visibility on volumes from Chenier. In June, Stage 3 reached over 62% completion, and the headcount is ramped to about 4,000 construction workers today. As you can see from the photos on the slide, Stage 3 is very much taking shape, especially the first few trains for which construction is well advanced. All equipment for the first two trains has been delivered to the project site, and last week, Train 5 coal boxes were shipped, and Train 6 coal boxes are ready to ship. We continue to target first LNG from Train 1 by the end of the year, and to bring the first three trains online by the end of 2025. To that end, recently, we commenced the process of turning over utility systems from ENC to the commissioning teams, with approximately 35 such systems having already been turned over. And in June, Pectl energized the Train 1 liquefaction and utility substations. a critical step which will enable power at the project site. In addition, we have begun to make some necessary regulatory filings in preparation for the start of commissioning activities on Train 1. We expect to begin taking FIRST gas into Train 1 in the next couple of months, which will begin the commissioning and startup process and will give us added visibility into the end-of-the-year target for FIRST LNG. Speaking of regulatory matters, during the second quarter, we received a positive environmental assessment from FERC on Corpus Christi Trains 8 and 9. This critical regulatory milestone helps to solidify our expected timeline for us to be in a position to reach FID on Trains 8 and 9 in 2025, which should enable us to realize project deficiencies of having Bechtel already on site for Stage 3. Our ability to navigate the numerous regulatory bodies and obtain the required permits has been a key to our success to date and is essential to our growth plans for both Corpus and Sabine. Now, turn to slide seven, where I'm pleased to cover some highlights of the maintenance program we're executing at both Sabine Paas and Corpus Christi since our last earnings call and how our execution exemplifies Chenier's cultural foundations of safety and operational excellence. As I've discussed previously, this year's major maintenance work would look a little different than last year's in that we wouldn't need extended periods of full outages at either facility. Rather, we would be able to complete our required maintenance programs under shorter outages or while operating at reduced rates, with a net impact to the total annual production from maintenance being about the same as a major SPL turnaround in 2023. Major maintenance was concentrated at Sabine Pass last year, whereas this year we performed major maintenance across both facilities. In the second quarter of Sabine Pass, we conducted a planned major turnaround for Trains 3 and 4, and at Corpus Christi we completed a turnaround of Train 3 in the second quarter and a turnaround of Train 2 last month. I'm proud to say these turnarounds were all completed on or ahead of schedule, on budget, had zero reportable environmental incidents, and most importantly, zero recordable or lost time injuries. To be clear, we will have major maintenance programs to execute at our sites every year. Maintenance turnarounds are part of our normal operations. So to have these successes on our major annual programs, is critical to maintaining and reinforcing our reputation for safe and reliable operations. As many of you know, this is predicted to be a very busy hurricane season. We have already had a significant storm, Hurricane Beryl, made landfall on the Texas Gulf Coast. In advance of the storm, we activated our hurricane preparedness plans at both facilities. These plans provide for operations risk assessment and mitigation before, during, and after a storm event. The storm made landfall south of Houston, right in between Sabine Pass and Corpus Christi. We had uninterrupted, safe, and reliable production of LNG at both facilities throughout the storm. To that point on safety, I'd like to recognize the personnel at both sites for having achieved major safety milestones during the quarter that are worthy of acknowledgement and celebration. Corpus Christi surpassed 6 million man-hours work without a single lost time incident, and Sabine Pass surpassed the 10 million man-hour mark. Those are exceptional achievements, and I'd like to congratulate my Chenier colleagues at both sides for a job well done. And finally, before turning the call over, I'd just like to say a brief word relating to the upcoming presidential election. At Cheniere, we have developed, built, and operated our assets under multiple administrations across both parties for the last decade plus. We believe our business and our product to be bipartisan, helping achieve policy priorities across the political spectrum. Economic impact job creation, global decarbonization, energy independence, or international trade. Chenier and our LNG deliver on each in scale. The numerous and significant benefits of our LNG are proven. In addition, our LNG platform consists of assets that we believe will operate for many decades, transcending any single election cycle. We look forward to maintaining our constructive presence and working relationships in Washington, regardless of the outcome in November, and to continue being a reliable supplier to our customers and to the overall global energy balances and energy security. With that, I'll now hand the call over to Anatole to discuss the energy markets. Thank you all again for your continued support of Chenier.