CQP - Earnings call transcript Q4 2017 | Cheniere Energy Partners, L.P.

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Operator

Good day and welcome to the Cheniere Energy Fourth Quarter and Full 2017 Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Randy Bhatia, Vice President of Investor Relations. Please go ahead sir.

Randy Bhatia

Thank you. to conference fourth call. welcome year and and earnings XXXX morning Cheniere quarter Energy's full Good at Slide for be website today's and call presentation access can found to on the webcast cheniere.com. our Jack Officer. Fusco, on Officer; Feygin, Vice and Vice Executive President call Officer; Participating and Commercial Wortley, Cheniere's Anatol Chief today's President Michael and Chief President and Executive are Executive Chief Financial

results including contain like of begin, remind discussion all statements. Actual remarks, I forward-looking and our statements may questions, would these to those risk. differ of what answers we our from your Before that to in a materially is could statements. listeners associated forward-looking presentation described contains two Slide

cash may In found these measures, to of slide as the flow. non-GAAP include financial financial measures distributable appendix comparable the non-GAAP deck. be A references can addition, GAAP measure to reconciliation consolidated we the such of most in and adjusted EBITDA

this our also or results, Cheniere discussion Partners' Inc.'s LP, Partners the On CQH. Energy, separately of After CQP, Energy intend financial Cheniere As for Energy do we'll results those Holdings, we or LP Q&A. CQH's selective part or and Energy include LLC, results to cover from remarks, prepared of Cheniere Inc. call Cheniere may and of not for open CQP call call, today's information

and the construction overview As on full shown then on the progress with an Jack fourth liquefaction quarter projects. update of and will agenda an slide three, at and give begin our year operating

I turn call Fusco, and our who review then CEO Michael Jack comments, we will now Cheniere's commercial Anatol will the results. activities, financial Jack's hear and the President on Following from over our from will

Jack Fusco

commercially, with results significant quarter Thanks for and review our Cheniere. achieved good relevant improved us milestones XXXX. the We in most financially, was for you XXXX just conceivable morning breakthrough measures, between. and about fourth Thank and everywhere from joining By a and we for operationally, provide XXXX year year you, outlook Randy everyone. as full Cheniere's

in the doing to employees, challenging workforce's face execution, We our in Hurricane to notably, are demonstrated promises in delivered Harvey. XXXX have and most we've for dedication, commitment XXXX. I'm did customers, so, financial the in XXXX, and stakeholders. resilience at sell since We and key XXXX, and growth of excited some on discipline, in circumstances joining our operational factors our improved company. our excellence, our results about which prospects of proud Entering record I'm time more any especially Cheniere's outlook

even recently product, Christi. even continues As cases, the new at it's expect our than which long-term our and we some growth for plans will market better anticipated. we support Corpus to demand in exhibit We've strength announced three SPAs,

Trafigura First, Petroleum CNPC. China in we or earlier this SPAs month, SPA and Corporation, executed January, long-term National two with long-term executed we with

We China. like and especially Department LNG to significant a have between demonstrates of the LNG China, supply These honored exporter, deal, Chinese contract of cargoes to U.S. and I of in another a growing and the for and an a United proposition long-term employees offices our Singapore. particular, Cheniere office the from cargoes and administration, the built LNG thank delivered than the additional activities long-term Cheniere's many in to Pass, CNPC transactions more would XXXX. in to match. of LNG in first Houston, ability be involving direct cooperation Commerce Washington, contract China. and historic Beijing, LNG We're U.S. in effort provide recently presence SPAs broad Cheniere's in medium execute though including opening from London, for across involved value intense their Sabine an our positioning, in in executed through upon in a milestone States XX Beijing, in to the is this difficult that company CNPC XXXX term support This strategic

are Michael, on months. a I'm check an five commercialization from key Train the Corpus on financially mark you Christi on now to famous will list in full quarter X the do next XXXX. now all at the operational you on remaining to and look decision of the of the my fourth next which putting as of hear to whiteboard, complete, now trains our highlights slide With completing I forward FIDCCX, focused Turn several a investment necessary to the make to-do we year final financial as for sure well. overview steps

provide Michael adjusted few will color distributable generated cargoes cash on XXXX, consolidated Sabine a guidance more EBITDA exported of financial over of of our the results on Pass some loaded alone. flow, We and record fourth XX $X.X For a than quarter. of billion billion, we $XXX quarter year in a the we for from $X.X in minutes. in more XXX full the provided LNG delivering including the year total over revenue, and last full XXXX, in million increased

We continue over have demand owing of pricing in we year. emerging like shift XXXX, the season XXX from demand an XX elevated winter in discussed has in past seen to have Asia our margins supply, has has believe, significant LNG to start-up regions shown resilience. Pass gas since product world. resulting and approximately outstrip countries in and LNG LNG This now reached and structural We exported cargoes Sabine around the

consistent the of to investor market, of mentioned to billion, the are raising our $X.X the months from and EBITDA. a Today, guidance to we combination full calls we our docks we customers new sell seen access to year competitive to higher operating of return volumes billion our access Sabine $X.X the the deliver has the capacity had somewhat as that consolidated as the advantages off for XXXX full LNG take. our commercialize year billion has to fact XXXX. colder near-term cargoes, a adjusted efforts amount our outlook function and production, strong $X.X pricing, significant addition, that I've contributed yield strong our have our marketing capability, directly In to improved to on and the volume production ability forums $X.X LNG demonstrated into of billion are to Pass production, progress at

XXst, on continuously These advantages an completion Pass our on are six through execution X X of support operational our to of initiatives. on completed Sabine LNG achieved and the and five advantages recent SPAs, have operating ahead and and update SPAs X are them buyers customers Sabine LNG guaranteed projects tied provides to of as We schedule. early capabilities growth and in to were and at Christi bear Pass Train our Corpus a progress Sabine our and energy focused of XXXX. volumes. XX-year within and December demonstrated Substantial months was Slide at Train that of delivered forward about October, ahead X Trains look budget. are ability commencing to or of competitive provide This to valued GAIL. so. bring We by at with understood schedule commercial we're complete Pass portfolio week long-term all which the to through in to service our leveraging at

identified from community, and notified X the be in are tanks, Tanks January, priority remediation the from minor was X. service, a in no and taken to is release safely is one is Train danger regulatory been X may stress our a Tank or facility. After repair out we we cause aware, appropriate and agencies. minor process. Pass leak and we there of assessed, have we you want X LNG vapor a analysis operational securing the at Sabine plans As had and our to being Safety root number and that the workforce,

impact Additionally, no has with there on this our The the seasonal approximately vessels recent and for U.S. to for light Coast winter impact customers' on closed we Guard scheduled We ship ports our capitalize pull-forward birth production In LNG been a terminal. maintenance week. Gulf and the at dealing to traffic events has event. has ability this Coast been This weather has days, stopped the some incident. planned opportunistically from had fog.

million to progress continues factored maximize In over like Pass are and duration X for we accounted range million and infrastructure our to occur events into for Construction production our on-budget minimize Train the Sabine Christi. Corpus of one and guided us X.X this events from which X.X weather tons weather. to seasonal schedule manage per of impact these such production LNG ahead general, year, You short should to have net train. annum help will Trains and to per expect events as at at X any X production of

some half in recognized which world-class, current be completion and perspective platform and in first next valued and We market X X by of year. X key is this Train half Train to of followed Corpus XXXX, on Execution Sabine Corpus competitive our the second our at the buyers at substantial Train LNG certainly at expect in advantage worldwide. the continues by for is

we train construction we the underway already has last under efficiently complete, Train schedule foundation LNTP, to limited work, schedule is notice that cost, LNTP to construction has LNTP. X most Corporation. fixed. X notice bit at under with Train Train and been, FID are Train on-site Getting X and leverage started transition give importantly, them head engineering engineering and proceed, discussed Corpus and which project prior equipment to procurement X start to XX% contract As finalized quarter, of a Under We designed the to will got personnel a Bechtel and and or proceed. to full performance and work progressed ground

Cheniere's growth. and capabilities demonstrated up slide seven, for formed bottom of strategic us marketing Now, the which turn I'll and at end-to-end on term liquefaction continue successfully to of I've let's capacity thesis incremental operational and on excellence slide, our laid a long-term how investment focuses of start set out a reinforcement our where reliability, the project the foundations basis. ability to positioning which

strategy today. market. reputation said I a of LNG is this executing prudent minutes on strong The in competitive foundation. distinct as our fundamentally ago, strategy strong execution a advantage a growth operator that, But few is a are given our we place a from taking As

LNG positions If side clearing short-term slide, the left demand. million us remained price despite is position it our growing you Gulf today our global to pricing strong with than In XXXX. this source ability has winter, tons in supply of the capture our but look year stable a feedstock through low-cost well almost and ago, incremental Coast higher to at proven on XX

our of since the months. with right side our growth the made significant slide, progress X advantage few and long-term to synthesize these focused pursuing last FID Train leveraging look in our Finally, we call, demonstratively, dynamics capabilities are to competitive on on capture next on We've the opportunities.

accomplishments, our beginning in my in the both refined Cheniere. We remarks, with by from was strategic failures. for XXXX stated approach year our approved and with I XXXX successes breakthrough As of and a emerged pride

Looking in commercial XXXX seeing ahead our what our market the call in the to beyond, significant activities confidence I'll at on over update the recent an we're the now, our provide and ability present today. Anatol capitalize turn And that market. my met and in to capabilities on opportunities to

Anatol Feygin

were and gas everyone. and needs plant Northwest exported LNG LNG Europe, the the demand the in continue and cargoes market of balance on summer from record to XXXX. Jack XX% as slide exported Fewer Loadings X market, deliveries XX% for Thanks in fourth the of were year, free satisfied the which to pull while destinations About for the Russia, in cargoes XXX quarter. the turn operations markets, Latin XXXX the new completion delivered throughout season XX% during growth. delivered most X pipeline significant during the primarily the the region country the China accelerated and to demand deliveries market peak production dominant the commercial gas XXXX. recent substantial was well especially three Pass for the the and cargoes each Mexico's to Trains volumes destinations ramps deals. the Middle decreased reflecting Mexico, nine. ramp the to Norway America as in of mostly morning European The up global Asia reflecting facilitated X delivered Africa, into than a with and Egypt of with of all about and Asia. into South This good up helped line in production East as from the export quarter Mediterranean. Sabine with the of strong North startup lower source cargoes were Korea, its schedule, more offshore in wells from that were via the as year. gas markets increase took of Please demand of cargoes over top trends in in Train the from to as in XX The again, world, ahead deliveries remained of Asian premium from

Now, we exited some of let me up on takeaways XXXX. as demand you on our dynamics LNG supply update global us key and

Let's it year course, XX% for turn and global U.S. strong accounted did a of supply production. to Australia about LNG than slide supply this of XX. XX X% the industry XX or for XXXX produced total million in Pass, XXXX, LNG. The via U.S., was The tons million Sabine XXXX. approximately more about tons in growth. of over only of produced growth

to Sabine strength of trade, growth and production Asian more supplies. global million to worldwide consume market We any markets the eluded in is the plant XXXX, XX and global Our to overall added of Pass than to single course, representing largest the more the to at grew of markets. in is XX% XXXX, continue earlier last tons year. than the contribution continue about These of grow. in XXX of about tons plant which increase to set This production XX% million

increase assumed the culture even an absorbing LNG it temperatures, year, LNG more for result strong exhibited observers the incremental million The Korea, was stronger XX% Taiwan but outages be expected Japan in in nearly over the cooler year-over-year round, back or accelerated or of Korea markets a time, year-over-year to demand million and year buoyant Europe's or more all in of Mediterranean importers, low propelled tons. million the of of nuclear XXXX. X almost an was factors, last declining supported demand performance, largely Taiwan. LNG in of additional Japan, tons imports and Asian most and was economic XX also The tons LNG in consumed and Each fourth Asia to was as an reaching flat for markets of markets This was a from market demand region's power strong of economics. quarter strengthened and strong not these overall, increased hydro in in generation, overall natural XXXX, Europe growth in The positive XX% by demand demand demand also and as funders long volume in coal-to-gas the surplus pull domestic global it power the shortfalls XX.X expected, switching year. strong in switching by production. a than coal-to-gas resulting a startup has delays hydro nuclear of reflection repeated China. rather in nuclear market and established established supplies, weather declining

global negative LNG can Northwest other markets of you flexible year markets need the from demand trade balancing called of see million or it. last X.X consider down in ended a market to resort, with Europe, satisfy As markets for areas, the as that year the sometimes the tons sought

in China's made overall supplies XX%. XX% a it was China's of incremental how year-on-year approximately XX delivery alone, The see in XX% XX% is capacity, serious approximately have Chinese this imported LNG to that combined. XX.X production reduced of portion, three XX last and Bcf Pass' Norway, Angola, gas growth, just double largest million tons producing of nearly China with demand LNG a of LNG destination about burn year. to global believe Sabine's quarter, and fourth will to Domestic the absorbed Bcf past tons, contributed the chart which quarter. both by Sabine to this gas pollution. X.X imported two government Australia's per coal of satisfied for the in year growth imports. significant our in incremental the of of and is implications was Guinea by sign increase We market countries and by In XX% believe incremental year constructing country of be about remarkable indicative approximately taking is million tangible sustained China about from of structural lower XX% ago. China gain air the This years positive the production China last is structural. Equatorial day that another growth imports LNG a can XXXX. the result changes of third in amount absorbed day is intake regasification production direct long-term nearly satisfied and demand currently equivalent business. efforts the what from China's the growth LNG pipeline You that the we for grew XXXX

the Aside boost reacted continued consumption on to commissioned added oil the along global XXXX imports need second markets attractiveness to XXXX. LNG to higher the good three clearance and of in this in from is million prices, demand and in years. a trains momentum winter sectors, power robust liquids for relative an incremental country supply two in rapid helped supply ramp-up globally, the the which with the through fuels. same X, ensuing We cleared this to parity, be the import build sanctioned Sabine year start-up several demand slide on prices the LNG and from a were the which meet Wheatstone markets of first new well-placed XXXX. Korea, requirements. forecast to expected price despite few and China; remains LNG expected over gas in satisfy five-year expected coal oversupply see the capacity the to the growth meet incremental next ramp-up the next advantages Collectively, have decisions early as to higher XXXX during these continue we and of past Pakistan the XXXX the competitive economic buyer period approaching growth quarter These Train capacity XX.X and XXXX, to manifesting and gas heating industry levels time, growing in enough LNG Turkey, Increased itself X, Train second we levels critical needed tons four in as years, demand. market of including gained all in of Spain, not of and With At expansion XXXXs, terminal the illustrate Cheniere, a increased the despite seen to at supply XX. past innovative a demand liquid four half trains, forecast Amal's The by the year, to Pakistan as in volume. years, against our regas Train. levels customer the for than is the the with for believe it evolving a lead-time fourth the for we've key for the in construction speed-to-market a and oversupply. new and growing new point reflect slowdown market, to

earlier, As recent Jack yielded efforts results. our mentioned positive have commercialization

and CNPC liquefaction with results. review transactions to your will Trafigura, advantages Michael who illustrations our now With to underwrite the a our will of turn capitalize over call competitive SPA and financial Our capacity. ability I on that,

Michael Wortley

the and by morning over $X.X clearly revised our then guidance metrics, an start deliver of TBtu reform range financial LNG and year including tax just in consolidated revised call. breakthrough reflect financial finally, we XXXX our quarter, we a I'll quarter, and guidance results fourth highlighting Approximately XQ. pleased volumes exported as is of of exported XX billion our Both $X.X by SPA update a to to provide the of impact total the give billion, cover expectations we our listed flow for TBtu We XXX $X.X XQ cash we from We remainder of the this well of some seven over of fourth report the within to in near-term Cheniere. during $X.X some XX% full TBtu billion third-party key investment on the XXX reported TBtu, EBITDA Cheniere Jack to now revenue components our community. results, tool commissioning. provided provided principal were volumes, XXXX, for fourth Thanks XXXX. over of consistently XXX objectives. TBtu customers, and was Pass over Guidance including said the distributable our adjusted operation use function. with and good to of the billion year and related I'm to including earlier, financial Anatol related will to to marketing XX% by guidance over listed XX, during exported everyone. consolidated I'll approximately the morning that. commissioning. was and our volume, Sabine our Of Turn slide and quarter on for XXXX transparency aim

to completion Our to March early marketing production in fourth and continue those to commences of volumes have function GAIL SPA to until Xst. X due substantial had expected the is quarter access the volumes Train to the access

During with SPA. XXXX, BG did as Shell the in Gas our Train reached Fenosa long-term SPA our and of Natural KOGAS SPAs DFCD, X foundation customer portion

amount investment-grade a related long-term our So, considerable XXXX with of to are our contracts these results from flow off-takers. cash for

our We as be percentage total dates DFCD as to continue expect these of continue revenue cash a SPAs reached. flows from overall to will XX-year grow

fourth but quarter, of the prior statement TBtu and of quarter, in LNG TBtu loaded loaded Pass, recognized quarter, XXX during consisting delivered seven the the XXX produced TBtu we about the During of less TBtu on as impact Sabine quarter delivered at of XXXX. will quarter, basis a of sold XX of recognized fourth quarter, the current transit which first the the recognized or in XX cargoes were income the in be end in that

or by third-parties. LNG TBtu of function also sourced cargoes nine from XX recognized an marketing that We income our were sold

fourth XXXX year and XXXX, and or the impacted quarter statement share. TBtu $X.XX or increased was share to the for impact attributable Sabine XXXX TBtu XXX for year non-controlling XX for third-parties. LNG income to to allocated loss of Net was common was income from attributable common sourced produced million $X.XX year full per by per of stockholders million Net full stockholders For at income net $XXX $XXX interest. income LNG the Pass the we of recognized

to the an had $XXX year, their feature unit, amortization Class prior CQP's common of to conversion the conversion impact on of beneficial related in we B to units non-cash August. million For

would of net positive stockholders this of $XXX the XXXX. we for year have approximately to full million Excluding generated common impact item, income attributable

Turning and slide we In factors primary guidance. Jobs we at like address and Tax I'd Cheniere. now Act, revised the to in to considering XXXX the have that expect impact our legislation four legislation recent tax our to XX, tax Cut identified position

will around At years fully which both won't level, several the on CQH primarily to compared approximately We CQH the effective expect expect agreement will overall NOLs. and of we the positive rates rate lesser corporate impact tax tax estimate by NPV] be starting and to on limitations same materially the [resulting the depreciation the lower from from under of extent these the due anticipate new limitations taxpayer the utilized the prior pay by million. rate NOL, corporate more rate Cheniere timing guidance. from due on and operating lower and lower factors to to sharing using to lower limits pay XXXXs, expansion on capital and of payments over we around largely positive will which initial taxes these to a new become Cheniere utilization net We on loss to that carryforwards for a will amount qualifying investments, a remain of that NOLs lower be $XXX overall will time, the tax limitations tax be due bonus XXXX offset but and deductibility. Functionally, we as early of income the expense our sooner tax new interest offset interest anticipate taxable a

better $X.X EBITDA guidance, is to year. volumes driven today, now $X.X guidance for expected to adjusted far billion. increasing thus on margins marketing in we're increase realized the XXXX Moving guidance billion our by EBITDA primarily The consolidated than

Anatol remaining we As winter for described, and season spot and number for longer LNG the Jack and higher during we've a market of anticipated prices higher seen prices reasons.

improved into the XX% forecasted from be volumes we approximately first visibility the for expected marketing Pass that are quarter, to what the in for marketing available have can XXXX of full Sabine function our year. to Given deliver

end Additionally, delivery which we water] TBtu upon of DES in XX recognized cargoes, or to XXXX first and volumes the is higher the had [on that the than be expected during the increase. will XX quarter also contributing XXXX,

of Christi we're X, financing, goals contracts Using in the debt is One that to XX% cover will XX% process Train for of we decision today, which the for XXXX financing which key Train project final arranging total investment portfolio of anticipate for secure positive the X. of cost for financial signed to Corpus enable to project. the

amount project portion As cash the communicated, we've we to expect we the cash using seven operating project trains fund the existing to flows future in the and the to and impact. plan delever Train equity relative first of higher of consolidated equity the X help

range $X.XX given with last the not on intend $X X per rate have to the in to we run at provided EBITDA provide level comfortable and While at an an flow $XXX million $XXX adjusted and Day Analyst of contract guidance do to not distributable remain additional economics year Train million X, this share. of Train incremental we consolidated cash time,

In the throughout strengthening market remain balance structure are conditions across of to sheet In financing, Train in we the we favorable. approximately the extent till the in XXXX, billion $X.X X XXXX, addition highlighted our enterprise, optimistic raised the up revolver inaugural refinancing Pass completion at at issuing Corpus bond CQP, debt by of flexible the an Sabine credit a into and LNG. raising the of refinancing bond market, facilities,

we interest That facility XXXX the the approximately billion your Corpus further of XXXX, term As concludes the an there's with but back time due do and and certainly to XXXX. in approximately Thanks lot our CQP proud loans questions. $X.X open billion $X.X execution a prepared be bank line we from capacity remaining for of strategic credit to standpoint, there's of on ready your are to for facility on work remarks. Cheniere. remaining total and Operator, look due

Operator

first sir. we'll from [Operator you, take ahead question Thank Instructions] Guggenheim. Please Matthew our go Phillips with And sir.

Matthew Phillips

Thanks. guys. Good morning

in we the this up versus given especially XXXX, landscape China's do So, this winter, wider XXXX? -- given increase, and head that see how you in, so of into the increased I XX as the tons just you repeated in coal caused that or that year XXXX for guess, market do the setting taken million factors and expect significant XXXX winter, and is parity terms into that

Jack Fusco

Hey Matt, Anatol I'll Jack. start finish. this is an then have and I'll

saw not proud ago. with over First, about structural long We've was it driving in was China so I'm initiative. that you that a Blue year weather, Sky We of It dependent talking China team. in my extremely and in on a of LNG. all We the yes, opportunity for for was cold change it in our time. high of was China demand LNG China but period what China's an it in been saw an extremely overall, that's prices wasn't Asia

they you, power serious minimizing serious been and in coal-fired quality are yet So, coal-fired The I Beijing times, long about it. heating in breathe. to China, to to And healthy there quality. extremely production it's multiple ways has having their a they tell air can air to their go be increase where to about need

We've structural it's the long-term. appropriately. positioned for the there saw we ourselves We So, think change.

by Beijing with Anatol any gaps. fill in have that nationals. But Chinese is let staffed We a office of actually my that, I'll

Anatol Feygin

question. the for Matt Thanks Jack. work, nice gaps, No

environmental the biggest is Asia and the part Northeastern continue country LNG coastal the gain are, increasing market successes long absorbed share that. goal. engine to the that to China to growth and the not As third of one we reduced and was the on city And we optimistic from to to in we route regas big that's the rest and along regulations, of large more sort go, gas and they've is Beijing we've success front, into substantial country, Emerging that overall largely the a function the the year you XX% have of said, new market the of very South limits prices air of -- that expect has reliable said market the structural a and said, especially of kind at five a to attractive see more things mentioned Jack as we Jack as be en China that China their had markets to why for down lost opportunities plants to changes. continue down like the But and its shutting piece were coal single a the its the supply. Central We these by guys, capacity, the promulgating coast a on while of way China volumes over as in pollution seeing extend been drivers.

we're advantage quite have and said Jack a to that on team as of market in So, place take that. great optimistic

Matthew Phillips

of we shift XX procurement CMI, cargoes And it. so those cost XX third-party is expect for -- shake piece ramped in how what the I to cargoes you'll big do fully should third-party up? at Thanks. landscape last I how XXXX you to be a do mean expect I And Got on CMI out there? though year. to you're continue mean cargoes? mean you look for or around or if even

Jack Fusco

couple a the continue decline, decline and to In some we will our -- not all we in reasons; general as those to I for volumes SPAs it's the to I'd That's would present opportunities reasons; opportunities a advantages the market of to number those different shipping a optimize and that deliver volumes amount the will opportunities. always CMI's integrated I would of stool. of say one because amount around will overall key not fewer as customers the positions that model expect assume presents. have of safe it that for say, -- you we be is the is commence. to take the us But the numbers so in opportunistic leg should But advantage characterize of will it's control to one that those

Matthew Phillips

Last Hub XXXX? one versus was cost Henry me. the during procurement gas for Understood. What

Jack Fusco

originally, did than modeled their we it leave had better expect great just but fully we'll continue. of we supplying team performance The plant at that. to a and with good was record volumes It job the

Matthew Phillips

Thank it. you. Got

Jack Fusco

Thanks Matt.

Operator

come from our Tonet next And Jeremy question JPMorgan. with will

Jeremy Tonet

Good morning.

anything you're go there contracts the the here? up right, to understand circle move up X that it have going sufficient support Just it CCL Train left you wanted on after my financing Train I in at seems understanding -- here. forward have rates like and back this. just you to you refresh us, keep FID you Is And outlined Analyst based if can commercial have setting FIDs lining forward. to before X to as a besides here what Day you've And if would I

help at Train or So, you would sense the next could if there? make more Corpus out Sabine, us

Jack Fusco

is this Jeremy, Hi Jack.

Train we have we FID get working to he's financing wrapped feel go enough that we as X. And Michael like X. the full into no, So, up, contracts on commercialize to can Train in so remarks said diligently his

X right lot from a synergies It be extension go If would of to the able that see, still X. over -- and there, depends, you'll some you There's right? nice a and work would started already being X of call it some Train groundbreaking workforce It the there. work a there's foundation Sabine would of X. We again, transfer is Cheniere. logical We shovel-ready. crews with with Train to we've Train out

product and we if the we the grow that demand way to market two launch FID. very having So, hopeful it into continues right been the we're that can trains has have,

Jeremy Tonet

be you would guidance revenue the It on like looking the played at the and That And to year a water lot seems CEI. great. recognition had into that here. end with just

the it of that solely was I Or guidance factors else change, wondering, there there? cargoes kind those like kind the recognition deck in played just of the are far as of as anything XXXX? the So, change guidance play in other into is or

Michael Wortley

our of on XX%, I'd drove, We deck modeled original had the say, cargoes the Yes, the Michael. guidance. lot of a it's Jeremy, on XX% change. water

moving the is the mostly That to left cargo well, I said now of remarks, up. the to I also of talked as margin pricing maybe As moving more bit curve talking We're $X.XX last like a in and $X or on months the number It's in shoulder XXXX. that's violent number that over move, a more little budgeted two call. up. $X.XX given summer that's the in the $X.XX about higher. a And winter, in but

really driver. that's good I mean, yes, a So,

Jeremy Tonet

taking helpful. for my all Thanks That's question.

Operator

[Operator Instructions] And we'll hear from Christine Cho from Barclays.

Christine Cho

that to the you looking is update China? that been in the gas industry for that? come delivering guys from is out more that Hi Korea or the on everyone. to Or CMI something would from the Is Any LNG of despite I Mexico. the start down structural top take there find seasonal might flat view Korea longer on to there mostly like proceed And of you have destination able could contract? term? be that additional of similar SPAs it guys demand would that from over saw top U.S.

Anatol Feygin

one. at pointed me it's this Thanks They Christine, finger Anatol. for the

So, and volume their spot we coal/gas, more Obviously, of large annualize cargoes contract. it before very that Korea. We contract Korea that, support to as will start going to do mean into did requirements. the

a out. moving early With say their sort how their gas of in saw aggressive year, play on somewhat, tempered meaningful of would the QX, looks a requirements forward. and of like to would out pro-gas about discussion late years leadership, it's to gas you numbers nuclear kind as those QX of been three plants relative but two very us move you change expectations, retirements Korea's I still be power very last market, to aggressive it's some have incremental in procured especially

in think continue attractive that's Coast. a still a Mexico, or -- market. be of for our to whether In we East West to backyard, Coast it's going that's that Obviously, very us, terms it's

probably day, the will requirements with comfortable West really have. and supplying of the very LNG any and As largest the you up we're, Americas, know, of to CFE user of given are it's Canal what in it and the Panama kind Coast

will we I market do and as think always serve to to to years, well-positioned a will continue time some role gas for over pipe a we CFE's PMI's ultimately the that be next shifts LNG, be there to and more as come will towards think, we're over projects four of structurally opposed two requirements. but there the we move think LNG infrastructure and on

Christine Cho

a And churning charters three five-year on we then out? route you will the you is to which charter increased a will think to the continue short-term some from have what's Okay. Should or doing the guys Asia, think do U.S. guys LNG to remainder you rates? long that pretty with ships basis? be I

Jack Fusco

end the water We the year. on actually -- ships Christine, we by last had of XX actually

we've been so with And that-- aggressive very

Christine Cho

But that's mostly short-term, no?

Jack Fusco

you to want it, It's call short, of medium it's all above. a the -- and if long

Christine Cho

Okay, okay.

Jack Fusco

It you And go through year it some get -- the months big when a and about takes as going one to half I business Canal. going far to over it's right? and and last it's -- thing that as shipping this learned the -- Panama is logistics, the is it's that a the Asia effort,

very our I feel it So, it comfortable manages pretty of shipping requires effectively. and pace that a good very team

Christine Cho

built? Okay. Christi a Corpus question eligible CapEx me. And one Does for for XXX% last gets that guidance assume And depreciation? X accounting your is bonus tax

Jack Fusco

and No, yes.

Christine Cho

Okay.

Jack Fusco

be in not eligible. it our yes, It's numbers, expected but we to

Christine Cho

pay And be of with included? what you that kind how taxes, were impact due -- to that to if when your

Jack Fusco

I already really far I that guess and a it we're XX%, material. don't but full would push think pushed that's so day out taxpayer out the it's at

Christine Cho

It wouldn't cash when the pay you taxes? do start anything to

Jack Fusco

would limitation, XX% the X writing create more -- so. off Train because NOLs NOLs No, and to subject those are new

Christine Cho

Okay. Thank you.

Operator

we'll have Fargo, Wells Webber. from And Michael

Michael Webber

are guys. you? Hey, morning How good

Jack Fusco

you? are Good. Michael how

Michael Webber

Good. nail the conversations kind or Jack a to play covered, obviously, and that how would to you pricing volume would finalize maybe of have evolve. it then financing, your financing could seem role. like of circle you're certainly to down wanted commercial CCX need to kind I know XX%-odd to because you're looking actual on back I a there fix of it

of terms conversations X? to conversations to Mpta most one contracts a of you out will ongoing you point So, use now I'm dispersed be a kind at that And Are just accordingly? a kind close Sabine curious you that X? CCX of from in to where your Sabine is conversations and pad transition these at kind continue would ongoing of your and how use around one on then landing kind commercial CMI the commercial can it or you here of to of easy once for point, those as

Jack Fusco

about exactly the think Michael. we it, That's way

don't we think the as a actual about As it number cover of Train. production percentage one, for the of

if right? counterparty cash the and it's of look intent of think creditworthy our way I portfolio yes, flows at and not, and cash financeable those provider you the or to it's flows But the a LNG. we the be XX% said stability covered,

CMI from optionality. we and sites a flexibility of and the as entity entity and to right gives our deliver us So, that either that like our

feel expect continue through heard should to commercialized do from these -- us on to us, contracts you as you Train we as we're So, completely X. then like And we CMI.

us look to You my [Indiscernible] should expect in be other to portfolio to the trains in sites. and build

Michael Webber

others. sure then end so But I'm were couple of the -- line of lag kind that of ongoing lines? or difficulty for happen kind say just X and so we there's -- a to commercial over expect no, of I'll a kind conversations kind handful getting the any We kind in shifting Sabine of anything along result? of those the shouldn’t There's being towards no that of

Jack Fusco

customer they needs, on dependent right by. what and need It's it the

we're us So, going if could to to the have to our in that than finance with rather build use portfolio, it's help continue we Train -- contract use already X creditworthy volumes counterparty we use help a then that out to the incremental sites. build it

Michael Webber

perspective, And of as a as then the sense unfair complication Corpus it may to more still just bring reasonable commercial that opportunity? does an about opportunity does you more X And X in could horse, get to Sabine the kind to to is maybe fair complex view finishing be do a Sabine But be a potentially parties more And that cart the table, the structure? simplify you I of a as that more more -- use bit put complicated? an X. or maybe in think is to and it may it that the more think follow-up you're just it's bit as know Jack, a a of on front from --

Jack Fusco

value for shareholders to value. long-term my so My intent create is --

maximum at just that like us at and like lot base. earn shareholder is capitalize our we've on that in of and for structure that want Corpus the capital going make what's returns Train X, we it's hinder for a again, from competitive not utilities, the we doing while invested So, et there's feel that the to very can Sabine base. already complicated, to right X, And cetera investor would we a

your decision-making not going in, our it's that if that's entity to influence of question. So, sits what

Michael Webber

I worth Thanks was It for time appreciate shot. Yes, guys. no. the a it.

Operator

We'll from Sachs. Goldman next Ted hear from Durbin

Ted Durbin

Thanks.

EBITDA X, Here's got I'll you're there? end Corpus churning the and see. you or more you you out of When lower on million the contracts say look take would $XXX the shot towards guidance $XXX one; higher a that million end put is you of another to at

Michael Wortley

cognizant Yes. range, of it and usually guys Aim in the we're take middle. the you It's that, a comfortable midpoint we're and with so.

Ted Durbin

understood. Okay, The--

Jack Fusco

run And Ted, out come it's we'll then our intent, done, with the guidance rate we as revised as for get soon you financing all.

Ted Durbin

Understood.

more or years? through As back-end unclear was we versus million X.X contract, on it's the XXXX I it in look color the timeframe any at XXXX loaded? whether front guess the much tons, on out CNPC that the how of comes

Jack Fusco

actually contracts. There's three

contract for So, another executed we just CNPC.

them We I -- that be view as environmental relationship what want long-term relationship. are. very a their initiatives my successful to in So

volumes in we and have XXXX, then for that through as we years. next going start are continue XXXX XXXX, XXXX, So, speak go on the and that actually XX

just but any just the very I far loaded, give very loaded with. how that specifics think with and much we're is comfortable it's long-term front-end So, a into going how to counterparty feel much beginning as is of we back-end not relationship as a

Ted Durbin

timing the putting some us XXXX on That's give can -- to hedged versus on, they a the XXXX, more one? over particular you're are X great. another color on weighted you are And you year million that tons head those they to when

Anatol Feygin

writable over some are we those a period, some over of that sort ratable are roughly and period rough completely the they're year. in throughout Yes, cargoes cargoes did several a deals seasonal -- there, there

So, relatively between XXXX you as can evenly dispersed through XXXX. think of that

Michael Wortley

that I'd Michael, deals. its And add are physical those

out a our really doing So, the hedging, that's It's we're not little balance -- on bit not we much easier but financial We're of did deals. business. physical sheet.

Ted Durbin

this some to did three say have prior fair put it fairly on in is months, or were that those on And hedges before disclosure? last the you Yes. recently say

Michael Wortley

Really late those started doing QX.

Ted Durbin

for it. That's it Okay, helpful. got Thanks. me. That's

Operator

from Khan of We'll Citigroup. hear Faisel

Faisel Khan

million the of, On sure one Board target too? FID to it I make was that was were million EBITDA, just sort that $XXX Corpus metric the guess, gentlemen. to just they to that in looking needed $XXX move metric morning were good Hi, sort the at or of Christi -- want was that Train -- to primary I at, guys looking metric the you X,

Michael Wortley

decision. Michael. talked look XX-year there payout based, show decent unsold really returns It in unlevered return But about and as and very here can on we Jack it basis think minimum. number we basis basically, a a make on up returns much that's we things easy at an and to And at a the are and a Board reasonable contracted ended we look better several it and I you how it's for to we as a contracted want only was a that putting No, was want make at capacity. said the earlier,

Faisel Khan

Okay, okay.

FID is the reach [Indiscernible] So, factor is statement? only limiting at that point this thing, to a fair

Michael Wortley

feeling year Absolutely, -- these immanent. and contracts that we kicked-off the financing were last knowing those and

a of matter So, position launch transaction weeks. a that we're in to in

way. wrap couple we'll our the up next this on thing over of be and So, three months

Faisel Khan

Okay. I some And CQH. your on missed comments taxes at of

will numbers? give that income pay Did that to just do CQH you not out expect much when can us has you expect So, number you you And say moved further? -- taxes? the

Michael Wortley

XXXXs. Yes, early

Faisel Khan

XXXXs, Early okay.

cargoes the produce? commissioning in And you got how quarter, Okay, did it. many fourth

Michael Wortley

was fourth a quarter, the think In it I couple.

Jack Fusco

Faisel. Two,

Faisel Khan

small of sort to PTD, a was significant And debit Okay, a wasn't got it. it number. it

of [Indiscernible] then sort the those supply, looking can you guess, hedges see physical hedging using sort customers, -- with -- talked are to you and terms your they and are financial indices? at, in you about just I I what's guess, of out Okay there -- are are of guys liquidity like some the extent of hedges, you or

Michael Wortley

Yes, transactions. as I said, tons are the physical million X

capacity sheet We but much be We will some financial so our a that's business. there balance physical of that that's do to demand and some that trying out There's hedging. do. easier we're to pretty small our from time-to-time, do have what plenty of part on

Faisel Khan

Okay. Thanks.

Jack Fusco

Thank Faisel. you,

Faisel Khan

the it. time. Got Thanks guys for

Operator

ahead. we're from With go Craig Tuohy Shere. hearing Brothers, Please

Craig Shere

marketing both contributions EBITDA efforts and How from the Corpus impacted morning. your Train expected blowout Christi Waha X? basis Good your has

Jack Fusco

I'm Anatol Craig. looking one, that at on

Anatol Feygin

Craig. Thanks

not these in economics. most in are as we we're attractive the procurement pound and XXX you know, built -- the as gas at gorilla So, looking the well Rome's anybody, days day. for a all obviously, search But basins as different of and

some for at takes those supply contracts. as it's So, supply time and But in the nice into Train X portfolio into decisions tailwind look economics and we reverberate it in ultimately a to general. in certainly

procurement to on So, to with efforts it's benefit Corpus support a attractive the moving its producer side gas our and clearly we continue volumes solution to the Christi. community of the

Craig Shere

X.XX the contracts [sacrament] that firm not -- say up Henry to safe times energy contracts? incremental these you it as supply Hub is Is

Jack Fusco

development Sorry, than ops as to so serve, will estimate, said, the the good about job the you for in to is marginally that. of we've And the Permian Analyst and and guys was for that procurement. meeting doing which gas that is the XX% And of the while associated fuel X% a cost talked really was early market is a and hurdle X.XX, is you shrink challenging at that variable marginally team a of a and make easier. Corpus benefit X% fantastic doing that the Day better gas

Anatol Feygin

incremental had we change you pricing asking get to are Craig, if to the our structure contracts?

Craig Shere

attractive feedstock. Well, lower people's have get lower more by may if be given relative this showing fees liquefaction to of they were I'm market this trying you able in to basis that current expectations a expectations everybody's sense to people that get

Jack Fusco

cases, XX that a for to to near-term us for I incremental competitive is it's on advantage up to talking not, to make but And that that us the of gas is us now, that utilities you're transactions the debt, ones structure asking remember think about supply got able very very familiar more are do and we -- okay make fact international the with right, -- our customers. long-term to a are, pricing can we're U.S. adequate that and Well, really a than but most our I we're to years. in be all think U.S. XX deliver overall, them sure the for is -- situation competitive

Craig Shere

you years C flows Great. to from $X that from quick those I getting rolling track are Is and CQP that like down kind money deep a of get pre-sold it of, in tried just question. capital operating quarter looks quarter? over thinner are Last flow off? minus a it ago driving just to amount cargoes operating the all couple Or the fair -- that the pay was and Asian ex-working were fourth CQP? very third in the cash cash What's the as splits, that? and some Corp-only

Jack Fusco

water, wildly I we the which probably think don't and of because basis, CQP revenue our at on it's good it's the the a that consolidated the recognize pretty when so given those there. That loaded the the a until recognized dock. on rule changes XX cargo recognize that's difference. they quarter. not cargoes unloaded, There's thumb is But

Craig Shere

you. Thank Understood.

Operator

hear next We'll go Instructions] Please ahead. with Ann Burstein. Jean [Operator Salisbury from

Jean Ann Salisbury

your give proposing Can morning. be LNG midscale project. than an decide expect I competitors to you're evaluating you get to if know cost Good projects us similar should we your lower of that that you if route? indication there

Jack Fusco

We're a actually filing for in applications. midscale

develop. toolkit that our depending tools to to the trying is market sure make what the continues how on So, to we're in have we do all

So, paradigm It's same amount the tonnage to the way a gas-driven. different the of we there's smaller of because view so get it electric-driven, equipment not it's is -- out. it's more

go quantities, or probably probably had and need would tons train. if to customers larger that we quantities, we would smaller million million, that So, a excess, -- with LNG midscale. that have if needed to there customers more, now we the a didn't it develop X.X stick million started traditional X.X our we trains, that If were to large we have

are don't so be variance gun, the you're stuff see But Moore's no them costs of commercialization. LNG in expensive day at Law, on going there's of to with it's more big none business. no of that a that think business the capital There's Board. material around good infrastructure I to us, there's in just smoking for there's difference a the end because this costs going the in So, liquefaction any

Jean Ann Salisbury

is And Okay, sense. undisclosed the Do in should then we Thank expect and forward? strongly one. prefer this market going quick makes what a just that you. contract customers terms

Michael Wortley

terms remain yes. I can as possible. are answer commercial very to you those certain keen And as on is imagine think the undisclosed customers that having

Jean Ann Salisbury

enough. you question. fair Thank my for for That's me. Okay, taking all

Operator

James. from with We'll Raymond next hear Pavel

Pavel Molchanov

for taking Thanks the question.

Chinese of not do point. with quick PetroChina with do limit contracts you kind related other from me, pursuing of off-tick types two they similar quick discussions And ones that, Just to agreements if agreement buyers? Does Chinese other from the are prospective off-tick preclude you the customers? with or in

Jack Fusco

any all Pavel, us with no, it does not you should for discussions assume any over we're market. buyers Chinese and limit that that

Pavel Molchanov

it me. Okay. That's for Thanks.

Operator

Stanley, Morgan have we with hear Giannakoulis. next We'll Fotis

Fotis Giannakoulis

and to Yes, that signed or that saw way another of buyers, contracts three in with hi different differ one the I'm the -- And category gentlemen the of traders? are pricing and end-users Chinese do you've I you I that completely these that that you've more understand the thank skewed customers. between one have trying you. if commercial to talking to or structure And discussions discussions type the contract another, was structured? I'm terms between how signed the about actually -- trying SPAs two

Anatol Feygin

is G. call Fotis Anatol. for what -- question. we'll you. It's Thanks Fotis the

DES, some and customers right to rules need effectively dimensions of players, than portfolio we're that a of in the that to up tools his full creditworthy question, We other service your we very can portfolio all of fact fast proud offer range our hard remarks, with that. of FOB, we them. the solution But And products come to customers; the a end-users. said that, have to be to and as like in have lot Jack

So, engagement. that will continue we

and all largest single of a LNG and with continue them. to with customers Sabine at player the of The working first history prosecute long all deal was types we've got we'll of portfolio

Fotis Giannakoulis

of Thank a of can you, there can Is in it the Anatol. that Can customer. us in share any it first you you pricing you terms structure? flexibility provide us? what to color terms Is the little in means? some volume? flexibility with -- more contract, Anything give about bit Is that talked this you

Jack Fusco

far us creative most you're want don't contract aggressive very to our as say, contracts. to as of see our give we're FID going of into run any Train some the their talk We're and we can customers No, the forward. about results contracts. the details when that of But and going of on I specific going get the we and rate guidance not forecast negotiations, to

Fotis Giannakoulis

Thank I appreciate. gentlemen. you

Operator

closing there appears presenters would are turn at I questions additional for time. no any the back like It or our further to this conference to remarks.

Jack Fusco

of We're support to looking I year just just thank want of for we incredible forward support Again, all XXXX. your interest. have And Cheniere. your appreciate an to and we getting in started; everybody we're XXXX.

So, thank all. you

Operator

today's conference. Thank concludes This you participation. for

You may disconnect. now

Cheniere Energy Partners (CQP) 21 Feb 182017 Q4 Earnings call transcript