Cheniere Energy, Inc.

Good day and welcome to the Chenier Energy third quarter 2024 earnings call and webcast. Today's conference is being recorded. At this time, I would like to turn the conference over to Randy Batia, Vice President of Investor Relations. Please go ahead.

Thank you, Operator. Good morning, everyone, and welcome to Chenier's third quarter 2024 earnings conference call. The slide presentation and access to the webcast for today's call are available at Chenier.com. Joining me this morning are Jack Busco, Chenier's President and CEO, Anitha Fagan, Executive Vice President and Chief Commercial Officer, and Zach Davis, Executive Vice President and CFO. 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 2 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 of these measures to 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, increase 2024 guidance, and initial outlook for 2025. After prepared remarks, we will open the call for Q&A. I'll now turn the call over to Jack Fusco, Chenier's President and CEO.

Thank you, Randy. Good morning, everyone. Thanks for joining us today as we review our outstanding third quarter results, which reflect excellent performance and success achieved across the entire Cheniere platform. Before we get into the quarterly results and our full year guidance increase, I wanted to spend a brief moment addressing the U.S. presidential election taking place next week. The election is an important time for our country. as we are reminded of the freedom we are afforded as Americans to choose our president every four years. I encourage all of my Schneer colleagues in the U.S. to exercise the right to vote in order to have their voices heard. As expected, emotions are running high, given we are so proximate to Election Day. But no matter the outcome, in a few months' time, upon Inauguration Day, this country will have a new president and a new administration. At Chenier, we look forward to working with the next president since issues and policies impacting energy security and availability are so critical to economic interests worldwide. As I mentioned on our August call, we believe our business to be bipartisan. Across multiple administrations spanning the political spectrum, Chenier has successfully permitted, commercialized, built, and operated our platform. We fully expect that to remain the case for decades to come. We maintain a significant presence and have excellent bipartisan engagement in Washington, as well as the state and local level with elected and appointed officials, given our business is heavily regulated and is a major source of direct and indirect economic output. I look forward to furthering the engagement in D.C. with the new administration in order to ensure our voice is heard on important policy matters that can affect our business both here and abroad. Chenier's assets and overall platform will last for many decades to come, and our objective is to ensure not only our customers and stakeholders, but our country and our allies can realize the full benefits of Chenier's business, well beyond the outcome of any single election. Please turn to slide five, where I'll highlight our key accomplishments for the quarter and introduce our increased guidance ranges for 2024. In the third quarter, we generated consolidated adjusted EBITDA of approximately $1.5 billion, distributable cash flow of approximately $820 million, and net income of approximately $900 million. These excellent financial results are once again thanks to our company-wide commitment to operational excellence. During the third quarter, we continue to execute our comprehensive capital allocation plan, which is designed to provide investors with cash flow visibility, disciplined capital management, and long-term value creation. We repurchased another nearly $300 million of stock during the quarter, bringing the year-to-date total to approximately $2 billion. During the quarter, we also paid down $150 million of debt at Sabine Pass, and we funded approximately $500 million of CapEx, mainly related to Stage 3. We also increased our third quarter dividend by 15% to $2 per share annualized. During the quarter, We produced and exported 158 LNG cargoes from our facilities, which was highlighted by the production and export of the 1,000th LNG cargo from Corpus Christi. I would like to recognize the operational leadership team and everyone at Corpus Christi for the achievement of this major milestone and for further reinforcing Chenier's globally recognized reputation as a safe and reliable operator. Bechtel continues construction execution on Corpus Christi Stage 3 on budget and on accelerated schedule. As of September 30, the Stage 3 project had reached approximately 68% complete. Pre-commissioning activities continue on Train 1, with nearly half of the required systems turned over to commissioning and startup teams, who are beginning to place those systems into service. We expect the introduction of first gas into Train 1 to occur in the coming weeks, First gas is an important execution milestone, and from a timing perspective, with that milestone occurring soon, it is consistent with the production of first LNG by the end of the year. We're fortunate this year to avoid any impact from hurricanes on operations or construction activities at both Semine Pass and Corpus Christi. As a result, our target of achieving first LNG production from train one at stage three by the end of the year remains within reach and substantial completion in early 2025, well ahead of the guaranteed schedule. We continue to expect to have three trains from Stage 3 achieve substantial completion during 2025. Zach will cover the numbers in detail, but we expect to have more open volumes in 2025 than we did in 2024, driven primarily by the substantial completion of those trains, and that reinforces our expectations that 2024 should be an inflection point for EBITDA, and financial growth should resume in 2025 as those assets begin operations. Looking to the balance of 2024 today, we're raising and tightening the ranges of our full-year guidance to 6 to 6.3 billion in consolidated adjusted EBITDA and 3.4 to 3.7 billion of distributable cash flow. The guidance increase is primarily driven by better-than-expected production, and incremental margin along with portfolio optimization activities upstream and downstream of our facility. On the previous call, we discussed a slightly improved production forecast as a result of our maintenance execution during the second quarter, and we are seeing that forecast production materialize. 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 as the team has been opportunistically selling our open capacity this fall. Zach will have more to say on the guidance increases in his remarks in a few minutes. Please turn to slide six. We'll update you on important development related to our environmental stewardship. I hope you saw that yesterday we announced the establishment of a voluntary Scope 1 methane emissions intensity target for our liquefaction assets. The target calls for Chenier to consistently maintain a Scope 1 annual measured methane emissions intensity of 0.03% per ton of LNG produced across Sabine Pass and Corpus Christi by 2027. The establishment of the methane target represents the latest milestone in Chenier's climate strategy, which is built upon our principles of transparency, science, supply chain, and operational excellence. Our measurement-informed methane target of 0.03% is about one-tenth of the hypothetical emissions intensity utilized in some recent publicized papers estimating lifecycle LNG emissions. This rigorous target reflects our commitment to leverage our data-driven efforts to improve emissions performance across our operations and is consistent with the requirements of gold standard certification within the UN Environmental Program Oil and Gas Methane Partnership 2.0, which Cheniere joined in 2022. The methane target we have set is a culmination of significant work completed by our team and a series of technology providers in leading academic institutions. We are able to establish this target thanks to the collaborative work we've done through the programs I've spoken about on previous calls. especially our Quantification, Monitoring, Reporting, and Verification, or QMRV, programs. The target builds upon and complements our QMRV program and other climate-related outputs, such as our cargo emission tags and our recently updated and peer-reviewed lifecycle assessment. The QMRV efforts, which have been underway for nearly two years and remain ongoing, involve multi-scale measurement activities to develop a measurement-informed inventory of emissions data, and that data informs the process of establishing the methane target. Included in the data set for our methane target, for example, are readings from approximately 50 aerial emissions measurements of our operations at our facilities over a period of more than a year. Utilizing actual operational data and not simply emissions factors or outdated estimates, provides a robust, credible foundation that stakeholders can trust and against which our performance can be measured. Cheniere's approach to environmental performance and stewardship has always been scientific, transparent, and methodical, not reactionary or aspirational. And we are pleased to see our strategy and efforts be recognized by ratings providers. During the quarter, MSCI upgraded Chenier's ESG rating to AAA, the highest score possible, with the upgrades specifically citing improvements in climate management reporting and greenhouse gas intensity performance. We'll continue to pursue our strategy guided by the same climate and sustainable principles that have helped lead us to the significant achievements we have accomplished to date. With that, I'll now hand it over to Anatole to discuss the LNG market. Thank you all again for your continued support of Cheniere.