CQP - Earnings call transcript Q2 2018 | Cheniere Energy Partners, L.P.

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Operator

Good day, ladies and gentlemen. Welcome to the Cheniere Energy Second Quarter 2018 Earnings Call and Webcast. Today's conference is being recorded. And at this time, I'd like to turn the call over to Randy Bhatia, VP of Investor Relations. Please go ahead.

Randy Bhatia

operator. Thanks, welcome second and conference XXXX Cheniere call. of morning quarter Energy's earnings Good and webcast to are slide access The presentation the cheniere.com. available for at call today's

Joining and and Chief Cheniere's Officer; and Jack Officer; call Executive Feygin, Officer. Commercial me Vice Wortley, Chief President Anatol President and Financial Executive Fusco, Vice Executive Michael for today's Chief President are

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

LP about CQH SEC proposed and transaction. read information and Energy the in they transaction connection The of to The with today’s between statement In its consent that measure adjusted measures nor these and addition, our registration Cheniere in information Cheniere by such Partners are Appendix the non-GAAP references between distributable can announced measures is with please the the of qualified reconciliation Cheniere CQH or because in LLC, discussed call of non-GAAP as transaction is the EBITDA connection entirety that a comparable slide CQH. most important proposed contain solicitation Also be of urged securities and we shareholders to an written consolidated consent of offering found those have carefully the the GAAP solicitation Holdings, may Cheniere presentation. cash note filed in include and to with neither and Cheniere today flow. filings A CQH.

do financial Energy and give overview Energy of discussion Inc.'s and or include call may today's Inc. CQH. not quarter or projects. an shown liquefaction Jack X. progress CQP, for at from Partners Cheniere with CQH's begin an intend our Energy to We results Cheniere CQP results on also of and of cover agenda our will results, of part information call L.P., separately The is Cheniere those the As Slide on update selected

we we comments, then activities, Q&A. now Jack's the to remarks, will from results. prepared will Anatol over our turn commercial Following the on for CEO. review open and Fusco, hear our Michael, After I'll Jack call Cheniere's call and will financial who from President

Jack Fusco

Thank you, good quarter morning XXXX. Cheniere’s great Thanks this results joining XXXX. as the quarter Randy, good and the and company second morning everyone. start of the we year review us was from a This full to for another for

million are will generated over first results several our time, has globe confidence In second in the first second and continued in tremendous Pass billion financial to million million guidance we to today upwards regions total the the and EBITDA where second $XXX And year for of over million. performance exported. Sabine consolidated quarter. flow during of cash to cash our XQ, $X.X our of we $XXX and new year. Pass the quarter EBITDA XX its and adjusted distributable the into detail. have EBITDA $X the the results in strong more flow. discuss $XXX the heading and balance quarter us the Michael reconfirming $X.X operating billion in financial distributable almost year-to-date quarter. and generated guidance $X.X in in exported But full from Panama, loaded the cargoes XXX our revising $XXX over revenue, our from reached our over billion we quarter countries cargoes across billion Colombia, in XXXX give Operationally, billion half first are consolidated of LNG bringing for XXXX, the $X.X Our Israel and We revenue countries and In to of LNG XX. produced reached and total Sabine now adjusted is

have We is LNG seasonality the which impacted LNG the second robust and even by during in see and quarter for pricing trough typically pricing. period market durable can continued to be a

structural centers been about than a gas around as sometime talking evidence and and to been which shift playing faster markets in is has we demand some now we world key continue a the natural meaningful anticipated. LNG expected this the in and that we to have instances see We for driver out

PetroChina our financing I backstopped Portugal, reinforces of a will was U.S.-China and the and achievement my progressing the on announced expansion Train in state-owned a the X on oil on counterparties: market address Train contracts heads Corpus X X a with from that are Train at by against continue approximately at three tremendous on project and to term commercial favor Corpus our Train rate X year benefit look X of progress fronts in signed able this geographies was a grow complete, prospective to X progress relationship the X Sabine period, expansion the Christi moment. the in is now for Train open The LNG non-binding continues leader agreement and electricity The and and now on at X, communicate are minutes. Anatol a and to the just gas XX% cost to XX%, recently expected shareholders. the Train At X, position continues efforts multiple pursuing U.S. The I’ll Trains a actively detail in in market both million origination of efforts multiple to to to be with and LNG Turn a views a May. X per from progressing continuing more Trafigura Christi Pass distributable long-term HoA of in and But share project. move others to Sabine central long-term our second competitive positive battle the SPA. process Slide X team we with for LNG both over our in at narrative customer mentioned sites and binding we Corpus this Corpus both FID and as which flow by the and cash We is XX% company, both to hope We’ve Cheniere’s hear FID the I We as where tons Christi. over per in commissioning Taiwanese construction position of few permitted year underpin we XX fully approximately of Pass CPC, to very Corpus Pass Sabine a quarter the Corpus at complete near-term. Christi, addition accelerated highlight Train summarize Christi at progress schedules. run with execution we’re be

we Train current Train the fourth timeline, the year. X this On during first X LNG expect of both and to achieve quarter

is is in a with our good X early benefited Train that off the now works recently You very will Corpus notice so from construction under start the foundations limited to X compressors proceed, Christi project included update. refrigeration ethylene notices Train for to poured.

As conducted numerous you we know, outages. during may maintenance the quarter,

You of which during several should during the the at resulted months Train perform that expect the longest quarter, maintenance outages X weeks possible. in shoulder Train. downtime when for outage second Sabine to these us Pass required

with work commercial together Our and their shipping are to the and has asset of terminal results our FID thus we Christi and operations, in efforts my teams released gas have XXXX delivered of operations, the we today. downtime priorities supply all Train the impact been in plans far to product the one Delivering of financial top in growth minimize on X. the Corpus optimization

world that grow confidence projects. ahead our marking our of fuel To to origination positive class focused LNG creating LNG the value our capacity Pass. through end Train my macro a ability efforts and incremental Looking are decisively Sabine on to backdrop today infrastructure platform at continues commercialization X liquefaction

an of additional in acquired the Slide we will where X.X our million we will of in U.S.-China liquefaction and at creation considered due full the for address eagerly maintain Corpus being growth a recently and advantage value FERC competitive Corpus of our recent the application some to every ongoing LNG U.S. order it a long-term to X, adjacent leveraging which we shareholder incremental trade have how we China additional throughput. to tariff. LNG site relates nominal at I tons approximately global information which runway have expansion to annual team now is site, In and addition, deliver leadership have developing position import course. our added are Cheniere in products, relationship the recently teams Cheniere. in are long U.S. perspective XX% capacity. to land on dispute, the the more There developments provide In list filed capacity of expected And of Turn

Cheniere seen is any to help solidify foresee investment without X,XXXs variable hopeful partners impact are we resolve and awaiting along a into indirect stakeholders U.S. that proposed very being to the the thus We From with of create. both Train the well project relates implemented. said, Cheniere support market continue into don’t That LNG U.S. is relationships to helps financing with U.S. to resolve key details U.S. LNG counterparties. and tariffs Christi growth our is nations. it trade and of the the build Cheniere can to long-term billion China and have expected as and and view dispute are more We an tariffs it and needs $X LNG benefits a jobs these China, that trade an as China the over of direct LNG contracts long-term is as that existing of for China economic China and one over our represented PetroChina, important beneficial issues to of to we long-term. business high-level, Corpus understood which economic of our important Chinese X. is

I insight China today. of we markets Anatol, some in call what who to over sell the the will into meaningful LNG will the LNG turn provide As additional expect long-term. to over we amounts see into

Anatol Feygin

to will quarter. everyone. the in half by winter with continued compliance implementation we of Chinese Korea Thanks, retire very in generation, a X and at Jack XX.X country’s continued in an will to increased imports After next decade. for grew supporting well drive gigawatts XXXXs, Refineries market on South through supply with used have the This has unabated as gas an than of The least feedstock growing coal economic a oil importer early saw of replace Indian impressive. liquid gas as regas to increasingly per in believe a the the of expansion gas which plan continue both critical million there additional electricity of XX gas refinery infrastructure grew and growth tons burn a by In that to Pakistan LNG during receipts. been XXXX The Fuel role Taiwan flat in in growth has of year into about as been been more will XX the production especially first from increase years, in alone half annum million in growth away between key oil. in tons over the continued LNG the additional have and first and year-on-year time first first call China share be for consumption and gas continues tons capacity X.X meet LNG recent Asia. India of nearly LNG world’s the has that needed tons respectively. half tons resulting XXXX. million the largest May also XXXX morning good resulted demand commitment LNG with LNG LNG season and a second the nearly will by is A been day of as going recent the pipe the LNG new has in power fuel winter, With India bcf taking that mix by limits demand. historically became call as Wood firm Korea, nuclear with expected our fuel coal X nuclear and in sector. of half from led the as XX% been with and concentrated and approximately by the a in policies. serving has but of fire to the gas first Taiwan HoA exceeding fuels by South of the play the virtually plans capacity XXXX and the XXXX on total quarter and country. strong sector total growth environmental to to coupled demand of XX% to demand to power forecasts are XXXX LNG imports India’s an gigawatts strong X in increase in demand. of million in demand increase support tons, an Mackenzie remove two plants us on evidence demand. CPC held add X million forward XX for unable year-on-year gigawatts has demand second generation gas a more million XXXX, net Similarly LNG all XX critical a than from makes strength that XXXX, the about for

throughout We expect to demand. these being Asia global coal pollution region gas drive create policies transition to Southeast incremental in and implemented reduce new the LNG meaningful the significantly from

more the the ago, discussed. a Turning at in time than dropped in JKM $X.XX, the in April. in at by shoulder prices last Asia, as now to year. the the prices by seen JKM highlights left significantly. which pronounced to April. of I After settled during strength first to in as been has but demand $X on This decline we February been this $X.XX driven and decreased season prices prices winter fell hasn’t the XXXX, Slide settled year $XX.XX $X.XX year prices JKM than XX, year the the same half graph growth just higher the averaged have in $X.XX February

come the Pass X key After increased million the the the supply United first first half U.S. is XXXX. tight. tons to XX% amid price during year keeping quickly LNG While been middle the and volumes supply seen XX% volumes compared just first Similarly observers as States supply year drivers. exported market of level fifth higher rebounded more $X.XX has to approaching mostly sustained during shoulder Atlantic conclusion LNG supplier. Atlantic historical differential been Australia Australian nearing when uptick has million tons parity little some over In and the over of the hence half prices strong of X the we're basin, has market prices demand tons Sabine new the but to we're and the of new States seeing XX largest point, XXXX The the growth stronger than XX.X in summer half for XXXX. winter, really MVP seeing to now is XXXX. have half into the summer in the ranges, a about Asia Asia demand of XX softened to prices Europe added price $X.XX, first tons wide more in been half Pacific with market. just increased again they Combined million from period, have despite United in during of the in a that million the . back outpaced oil between last online additions. have averaging the delivered an this call surprised XXXX, prices first unusually year, exporting in high what and million the the exports extremely than has supplies four standout substantial over Today’s new than tons levels of of the

gas have a enables like of advantages These highs the and result As cost signals sustained which this prices three calling has X now Bcf Turn X is increase averaged winter a XX time by market point Hub and of to almost prices. here increases to increased XXXX. has in Permian lesser the anticipated been Slide levels at further to to an for day the Bcf Year-to-date LNG to outpace extent dry that's it additional production. growth a around recently case X year-to-date, in solutions provide is Utica but is Hub-linked day Domestic by of low world. driven price than a any Haynesville Basin. gas domestic to by end from summer with only for growth and approaches market pricing, and add expected given production strong Henry pricing increases flexibility year-over-year led the equivalent investment the gas the production Basin on supported customers in LNG demand We us by and in evidence expected by Gas Bcf in have sustained liquefaction the region the not Cheniere more Marcellus production infrastructure tailor and Marcellus year by and also continued the U.S. the U.S. Henry XXXX. for LNG Permian been XX, to in Utica

about on illustrates this drop chart are We right months over lower of as confident slide forward ever for past to The Hub Henry pricing. longer the a the in curve the Henry few Hub year. as lower the

in is competing for and Hub will first review production now increases to And Henry strengthen fuels and efforts LNG volatility over $X thesis additional capacity. relative the Anticipated in to dry XXXX. results. prices turn liquefaction financial The year above will U.S. continue sustained to compared commercialize call our significant tailwinds forward for structures and and pricing provide gas low overall decreases I who domestic continued calendar Michael, our now, to the

Michael Wortley

everyone. Thanks, good Anatol, and morning

of over First, of generated consolidated results update financial second adjusted provide $XXX some recent activity our financing second In I'll we of quarter, income an the our go million. Turn and Slide million to XX. and EBITDA billion, quarter revenue now $XXX highlights $X.X then operating consolidated and our on from guidance.

resilient Anatol discussed. Second marketing quarter Jack margins results were as by supported shoulder through season and robust the and

which that an of over LNG cash loaded was TBtu to will TBtu $X.X our of XX few or I revenue third-party year $XXX to volumes. minutes. almost this of XXX approximately long-term recognized due cargoes and a remaining the volumes of in target billion, three timing quarter a EBITDA first Last of in performance none XXXX in current lifted over all our more transit for Corpus Pass in With with to commissioning These distributable early quarter. $X.X of the of prior our and of one LNG consisting forecast the primarily TBtu Train in anticipate SPA the the adjusted We remainder Pass of which during plus in the our second stable volumes exported in end year XX loaded income the XXX we guidance, by and Our of marketing the billion XXX is customers that’s quarter, relatively our In TBtu of on Year-to-date marketing EBITDA the quarter function in flow consolidated lower second effect at now plant on meet from X. delivered for function. and and We reiterated remain during some Sabine and expectations exported delivered the the TBtu volumes available of were than were the full and and lifted quarter. quarter basis of Approximately quarter, to primary the consolidated XX% million. four XX produced maintenance X impact the X TBtu was production. during as until a were generated TBtu sold were trains cargo TBtu operation. SPA we line Sabine Trains that seasonality second have quarter remain we X and in XXX recognized of Sabine or or discuss quarter will completion during

cargoes third from approximately operation quarter the on The income XXXX. plant quarter first lower of water our impacted and decreased of the prior XX large by primarily Net X diluted basis, up income quarter to per or an pricing sold income decrease common recognized in at and the basic that to the marketing parties. at to of as was from due year-end compared share $XXX compared and or sourced pick attributable LNG decrease million driven a of $X.XX loss stockholders year. this marketing downtime also cargoes for was a million function cargoes, TBtu net of second on $XX We by a quarter to from XXXX first

consolidated today billion and Our adjusted for million full in million. guidance second were are to and the guidance $X.X cash $XXX quarter distributable our results flow our $X.X billion with reiterating to expectations we of $XXX quarter our reported upward EBITDA revising year line to XXXX

million and the quarter. we our of Corpus the and $X.XX guidance $X.XX expectation with provided per with be CQP revised stable Train before for the from the has announced that May of available the unit guidance of Corpus rate for $X.XX $XXX X remainder dividend and also of adjusted marketing I’d guidance inclusive CEI CQH year, CQH we We're end XQ. which the run adjusted to of and billion $X.X billion completed approximately EBITDA to Train $X to May the is come the levered or life has revised Corpus run equity significantly $XXX Turn been $X.XX of billion Trains the volumes distribution those distributable with LNG Train in to a rate points EBITDA is With the FID debt billion basis to project overall add X remaining investor XXXX to and distributable the key guidance an consolidated flow flow flow delevering million to rate dividend $X share adjusted drawn the we’ve not Slide function cash enables fairly XX% X, X X generated cash and run distributable previously of guidance Cheniere we cash the while billion The relatively and Corpus is for XX. Train fully third Cheniere X. operating transaction to rate anticipate from debt. to our debt-equity consolidated flow now Total fund amendment We project. to the X complex. In cost grow upsize of million per contributions portion of over XQ $X.X of share. $X approximately which credit been anticipated details X and EBITDA be EBITDA reiterate and reiterating facilities basis, $X.X and we from expected Train our of ratable consolidated to cash an expected per like for to $XXX adjusted that to run of some us to announced our to a of the of of transaction was Note On to was merger of of bringing facilities $X.X to XXXX. XX:XX Christi our by of anticipate for on and financed update. of reinvestment close approximately Financing after Train update

to distributable to Pass and We consolidated Corpus deploy similar of of strategy EBITDA we to commercializing million cash $XXX for generate expect XXXX. our same free and X Train the financing million additional and its With EBITDA Train an million anticipate to adding Sabine be $XXX cash to incremental to XXXX of X from billion through train we available million expect $XXX $X flow. platform, almost adjusted $XXX X,

over and ready attractive other will Cheniere. concludes Operator, with return That and in liquefaction our line capacity significant your remarks. interest we're you the incremental invest to projects continue a Thank shareholders growth for questions. for time and your expect accretive to We an returns capacity, open time. to capital give prepared

Operator

will from Barclays. Cho Thank Instructions] you. begin with our Q&A And Christine [Operator we

Christine Cho

doing with of the Thanks potentially of Corpus in With could similar Christi. remind to Permian pipeline? – just you for supposed us where you of what spread all And this woods the advantage you're projects neck Midship your your to color gas that mid-con that the in deliver procurement for take quarter. stand you with are all Can in the how Christi? gas Corpus pipeline

Jack Fusco

good your First, of year. and on I’ll gas about for half Christine, first our the quarter to the Corpus. We thank question ask this feel supply execution Anatol you. very for address about the directly

Anatol Feygin

Christine. Thanks,

as was – great Midship was situation like to procurement a are STACK. gas that didn't allowed and feel player SCOOP in bit solution where us a and we you of a access very there We know large unique a

working there pointed wired our the And the an as the so out, optimal tremendous for as discussions would involved involved amount remains optimal ensure to us develop are In all in to southeast. all Permian, efforts and case supplied. of that we very and very of is way projects these of well Christi infrastructure these you you advantaged well access. and is got of a Corpus and are in heads that for we what imagine on And that

close with of of to the and engaged leading all both are of So can and say very the the terms sponsors producers I those projects, projects. we're the in that

Christine Cho

How much for more are you gas Corpus? procure looking to

Anatol Feygin

I am not sure.

is have we that range we aspect we that plan need. ensures the of the have that will also but And the the molecule So that capacity, a that molecules just not a over it capacity coming five work to year the we the supplies And have or so period. have access that producer partners facility. – our with those with on we secured we to again that ensure the

Christine Cho

I guess…

Jack Fusco

significantly Christi. huge and that's opportunity site that FERC. a We for grow that And strategically filed what think to us Corpus at very focused on we there's we’re

Christine Cho

around I’m I you have. guess assuming more you gas already my is have Corpus? procured question for

Jack Fusco

course, Of course. of

Of course, we have.

today, We’re supplying right. Corpus

at gas near the time. amounts for you we – out year time that and molecule of for just it's all but sliding have we have of move various have in about. secured we So that need the further of you asking are what procured scale don't point medium question as in We twelve, term and will is a a

Christine Cho

what X? would when some you for on feel Christi to Train and when And Okay. would did you can X expect And we comfortable similar can of us Corpus that? limited EPC? give to idea what notice do a And starting Train you then you the

Jack Fusco

earlier by think Well, to with I before. even even and relationship significantly our and first and that Bechtel schedules off declared ability bring them execute in accelerated our that's on guaranteed think continues what I the we was have published our evidenced on to stronger get was trains than

our we head X Train strategy to were extremely was I as proceed start customers. not did ensure believe SPAs down only our think that us far successful full Corpus give we with FID, but Christi that that as notice with limited pricing invoked – it and also the on as I locked we negotiating a X a on Bechtel that Train our it

can in announce again we continue should invoke X. to growth we you for we're Train our so ensure margins today shareholders that plans, additional and and though locked So ready then anything Train us with they X our – with not on and that to expect our

Christine Cho

just last be There're the me. delays. one They’re with not to around headlines midscale for you delayed. There’s lot going understaffed. and to be give Okay, a permit There're They’re update FERC. of going Can an us then timeline? hiring been consultants.

be interaction would So with your FERC any insight on helpful? own based

Jack Fusco

you, Christine. tell I’ll

very like with [indiscernible] you a my I FERC see having commissioner sorry As the right matter. to now. relationship that for of know power in was it's influx long resigned. bit most And industry for have and career little I been a

think continue to gets time we'll expect there. permits tell he I projects rapidly the and transpires replaced America will FERC allowing and as what processing But construction would focused be and I see possible. when to jobs in extremely on as

just as timeline of but as FERC. think timeline – exact – So out it's right a now approval little coming uncertain far there – I the

Christine Cho

you. Thank

Jack Fusco

Yeah.

Operator

next Okay. And Tonet from to we’ll our question with Jeremy move on JPMorgan.

Jeremy Tonet

to off… Good start morning. I just want

Jack Fusco

Good morning, Jeremy…

Jeremy Tonet

year, relative of going If make that just start what’s I in I to want XQ. here decline XQ EBITDA a seems see guide understood take everything sure XQ midpoint off this your was and is like and to with and the I achieved I Well, happening. be Thank. guidance there to it

margins of kind impacting, especially if in there? was recognized be could see business I have any presumably that be headwinds so quarter fourth that the since or wondering better some should maintenance in the would CMI And you just

Michael Wortley

Hey, It's Michael. Jeremy.

performance said at marketing only I X.X Randy and pretty impact. XX to ratable little Now, we're said be We're cargoes expect we of an XX year. the I don't mean really north a at over – forward see about a as going quarter.

margins the they don't marking while had So first impactful have impact in the quarter.

yeah, we XQ think I So we XQ. see steady and mean, a – pretty

year but different train ratable. the Next totally be pretty once for a now comes will on, next story

Jeremy Tonet

that development? I back talking reason to helpful, Is in of just given go there's XQ That's make that be that that XXXX. year, event early this to are And the you're think the event it’s – I XQ would fully coming if to the this thanks. about want tend XQ more believe any to in online going us a cargoes there commission versus

Jack Fusco

we Yeah, outperform. I’d guardedly to with closely that will very make I'm working say that sure optimistic the commissioning safely to continue rapidly that Jeremy Bechtel we conduct and are and

So our under strategy and over to promise deliver. is

Jeremy Tonet

Sounds it Thanks me. good. for question. taking my for That's

Jack Fusco

Thanks.

Operator

And question from Thanks. we'll Michael Fargo. take our next with Webber Wells

Michael Webber

Hey, good are How morning guys. you?

Jack Fusco

morning. Good

Michael Webber

proceed books summer that in you dynamic vessels XX then that CMI within that And in actually cargoes with There's yet how terms there? around whether you now, around – yet you do continuing a how Jack, earlier program it's the kind guess no but the kind known with peak I'm I if that do know color seasonal proceed I pretty positioning lot just bit you for sense off for guess if this I CMI I around came ramp of you and up terms season? do in of your earlier. still not Does into have swaps? at around of start know you period? context starting to guys as or would that a recent. there's – in a a unclear, curious it’s give impact implementation tariffs FOB pause just of the

Jack Fusco

I Well, Anatol I growing you is to worldwide. that's LNG I and good extremely strong Michael assure – demand you very for question, know but a have slides, from mean see

and So time, trains at Christi ships we've a and with at – it cargoes. will which Train we're the X going need the commission two Jeremy Corpus X. commissioning had are if find Sabine asked home same questions We Train to on we talked the

believe shipping from the China closely come come on we counterparties good and access need in continue that to We're hopeful countries publicly. think heavily relationship. I don't make customers that just are wars and come to can our productive. the CNBC resolution with of Chinese I can but I've the weighted two was that resolution, on we I The hope I quickly. extremely are the We're working to tariffs product. And we to some U.S. build PetroChina trade not I our we towards around and said have said I our a winter. get sure world. to that contracts that and molecules and site those So to early solidify relationship

sent can a We have that. to be product and going demand flexible that's product a we're to anywhere that do it's prepared in and be

Michael Webber

range about their then maybe today, list you into tariffs? Is the of there. as I getting that in you look think saying just potential conversations What of And Okay, are buyer just probably a and your the about just oversubscribed it X of it. of and a Sabine percentage broad would you we of the way if at that’s terms think potential around about that helpful. buyers? then range they in think what Chinese the terms subset And then noticed say you’re they impacting are probably group – in even timelines? people are

Jack Fusco

tell all going going because Gulf divulge FID felt clients LNG you project extremely we a rights have not just X prospective is I'm an I'll the on to to benefits to next train. and it be Coast on and competitive Sabine that in be site Well are. who there’s I our expansion lot project of that that should

I think my for doing who would origination head our staff cut worldwide, runs off Ramsey, that.

I'm a – Asian contingency there not say would expect to I'll I clients. I good but we're going just expect So of talking be to, would say to and

Michael Webber

costs can weeks more couple downtime of Okay, the guys a quick that’s and me only weeks, for and with if couple it’s apologize I you'll this. SPX, terms but the volumes And you one of I helpful. then the missed one additional indulge if associated quarter? quantify But in in just that down

Jack Fusco

cost lost a cargoes. on yeah the few There wasn't marketing I not foundation say We’ll material. mean customers, and impact any side but of real

Michael Webber

the right, Okay, guys. thanks great. All for time

Operator

Fotis question Giannakoulis And we’ll take with from Morgan Stanley. next our

Fotis Giannakoulis

Jack, tariffs. implemented? the there additional like morning on have flexible? And future U.S. I costs and thank will previous any on Will the Cheniere good Yes, make of the follow would – question and the U.S. impact what you. growth projects. trying tariffs other about to up volume the Is be these understand to would just are I'm if they

Jack Fusco

shouldn't or the Chinese LNG right, really tariffs, tax the from because right exports by can run the at see for a are it it's perspective No, consumer obstacle us, run are impact you tariffs on rather long a you whether sell short U.S. a that right, worldwide. China imposed than to perspective, an look

Chinese with to long-term contracts for quite… that don’t So while currently It's know have going into. discussions that Fotis? not we it if any slowdown impact additional on counterparts other entered may growth. on that’s Does or I helps, have the Cheniere

Fotis Giannakoulis

whether the to the BGs they’re effect a they your have U.S. difficulty customers have I'm volume, the U.S. obviously, wondering if would or your any costs going contracts, traders to buying they buy understand impact? of – am they I current if Yes, but not additional trying selling after world that in or volume would they’re

Jack Fusco

Shell to don't Anatol addressed best know but probably do us, is It's I have to it than you anything…

Anatol Feygin

U.S., growth of globally right. record, demand consumer volume. thanks Chinese these in think business as and said Fotis. absorb the changing volumes Jack The these great of the respond conditions I from of to LNG the thanks, of The this the flexibility whatever Jack aspect ability is for model is all and No, happens the cargoes one importer incremental – to and sourcing the to of helping to

globally and these marketing it the goes So that's side off model on takers can market. added our China make How best our is we our its business TBD. it where optimized and and issues again value highest to function sure how that is resolve will

Fotis Giannakoulis

the I of battle and and Arctic? are also that am Russia Mozambique. sanctions to impact you trying and U.S. – aware that you contributing like how strongly to trying competitive And in Thank potential expansion you, to if projects Russia do if in And non-U.S. or about more the Chinese can you comment – understand proposed Anatol. will – are projects

Anatol Feygin

guess of over the Jack into including for And Henry have ongoing. sub and good proposition very counterparties productive look pricing. of delivered it even Asia, current I $X is discussions, said, with lots and are with those Hub competitive we discussions all including as pricing at us value forward – China, you and if Yeah, world so China the extremely

that unquestionably a is hand. to So huge advantage our that

worthy you compete very as can Qatari’s Now, with no the there competitors, global are, know, upstream costs. one

pipeline with and those be proposition than cetera share of think with So competing our that fair we to projects, value et win that our offering because has. commercial fully project the flexibility we'll expect we the and more

Fotis Giannakoulis

Russia released little sanctions And sanctions and you investments can a on morning? about that – bit in the this potential were projects U.S. the talk energy

Jack Fusco

No.

Anatol Feygin

No.

Jack Fusco

sorry, No, Fotis.

Fotis Giannakoulis

Thank both. you much very

Operator

Brothers. from And our next question comes Craig with Shere Tuohy

Craig Shere

morning. Good

Jack Fusco

Craig. morning, Good

Craig Shere

through issue, perhaps of five utilization to on a for through to sheet you process? recognizing winter. we perhaps what not income Can commissioning X see over three one, a the the an project against and Corpus X might kind process opine commissioning X.X average months you Sabine nameplate Train five months three it’s statement balance Do concerning commissioning of

Michael Wortley

Michael. it’s Hey, Craig,

five, train, think the a think to seven a place the of maybe obviously. commissioning maybe just for I about it’s process cargoes over little all easier less as utilizations kind six, little more,

but put So margins for and calculate windfall cash the the and nice into company, should very no cargoes those be you the market P&L winter can just impact.

Craig Shere

Sure.

on Okay, higher these it cargoes fair early, suggest commissioned. I that Is slightly things limited to single mean if kind certainly digit mid that that very of we're enough? to fully

Michael Wortley

It the cargo, know. takes make so low. utilization is a don't first I Well, to while

going process period. mean a the So is to commissioning multi-month I be

Craig Shere

it’s to way? margin that U.S. economies, Chinese exporters consumer about Qatar want mean now of it is to kind simplify LNG just want inefficiencies the ask tell China me some I And American doesn't Then deliver at that to wrong is the you're describe of $X.XX, to $X.XX spot I talking maybe that to and the the exporters the some and it is benefit deck say efficient to understood. Australia, losing good, net I'm Okay, it I whole if fair pays if to underlying and of but from fair this happen. that elsewhere. impact tariff not Obviously, degree rearranging doesn't it's chairs. to to just most this issue. maybe

Michael Wortley

it a entities that that possible it’s it it a entirely dime. exactly that U.S. – And the handle not early ways exporter Again, that’s are how it's this. can in think that stab. reasonable tune impacts on saying we lots the absolutely to Beijing into I'm I them is don't I fully of world reverberate offices There the right. very sure, of credible think but different expect right. the this the are Michael actually of lots have chain, LNG into should supply not – does that and hey issue, go you're asked, you right there to and competitors as Chinese

said, So will we it clearly Jack is something we're And be as working with. against tariffs. that fundamentally

that We’re made And trade sides. is has flexibility and LNG fortunately product the we the win-win U.S. that both us economic embedded far. fundamentally and viability offering a pro-free for in think is so the successful

Craig Shere

more I I quarter Anatol, about hearing believe in wondering this price my trends about up the we're and you. and I'm particularly if know relative don’t last last wintertime that ammunition spikes use now. you're that to Great. one And China for prospects and investments storage, overseas new more follow-up to but asked two have all for may tomorrow, starting last moderating I for years.

Anatol Feygin

China is there dramatically. domestic very Yes, reached in continues because increase XX% level the The any to a – point so, right time We storage overall rapidly. to – developing Asia gas market. China, of time course, India just so and like there pretty soon and amount its business grow to to directive expensive, market is consuming your is being growing challenging they're of don't stores see the XX% that their of

roughly others in their to one of requirement. that help they'll – bcm peaky that demand XX very seasonality, a ratio be summer end think That's to main the So a that's working of market. capacity have increase coastal tee can double as winter but winter smooth of PetroChina to a as and we they're It in and by high still is out plan which about XX this still gas growing continue to five demand, the cities to by it will a today, bcm decade XXXX. that the rapidly

Craig Shere

the I appreciate seeing help. Great, forward I to look you.

Anatol Feygin

Likewise, thanks.

Operator

Citi. move will We Levine Instructions] to [Operator on Ryan from

Ryan Levine

morning. Good

Jack Fusco

morning. Good

Ryan Levine

LNG marketing see key the the milestones future [indiscernible]? do And what contracts? to having Cheniere are launch What impacts on business this is you

Jack Fusco

Well CME that's conditions are for extent that's price best transparency lots in of comfortable question used a their the a Pass to liquidity – market and saw the point, with as provide certain their being under as physical go through Sabine right. a There it really launch. and vehicle and lots but to of it launch that product CME, a asked we and obviously. It's are you again another the question for would steps the delivery for LNG product, successful we is

Ryan Levine

or do just mean would I trains market? Okay, more out Sabine it think the just help of you – you is it in LNG future of marketing overall support

Jack Fusco

benefit linked the two will some something offering. to that becomes launched do ability and have are expect that and commercial we the it's to those Well have this is to extent liquid enhance thing our commercial

Ryan Levine

of change in just then to two your hearing in countries. And altered any am one, the confirm just between provisions contract, terms would Chinese contractual Okay. by that that the contract that is I be of provisions correct there tariff no in

Jack Fusco

That's correct.

Michael Wortley

yes. correct, That's

Ryan Levine

you. Great, thank

Jack Fusco

Thanks, Ryan.

Operator

our Jean Bernstein. we'll with Salisbury question from Ann And next take

Jean Ann Salisbury

up that tick too in of any headlines conversations seen future recently, wonder European it's the whether forecast early from know it you if Have to morning. it’s I but I will buyers been materialize. trains? contracting in Good it for

Jack Fusco

Ann. Jean morning, Good

our to and full uptick know, I conversations of Anatol comment blessed are Cheniere We helped robust. on a with what you getting that… have started been very already us have there have do we don't to European in seen that buyers contingent want But

Anatol Feygin

a with a economic been our playing driver historically expiring in contracts overall. meaningfully number this of European now with guess and like different it out coal markets dynamics lot playing the decade, you buyers with we UK. have of the depends on continent uptick know engaged you amount late lot existing in a are relative are and to in been and a out couldn't buyers global of say the discussions number reasonable of that There early augmented as the today a and dynamics long-term where I a legacy discussions to Clearly, continues uptick Europe in than conversations are of nuclear and that's the discussions. measure. in with be, substantial I of that next, is growth

Jean Ann Salisbury

my trains, has Should others worry And they price recently. little structurally fair. which is you’re of customers might seeing that’s than a the anything Okay, be a technology if in investors that Can existing down have different using sales your global, winter other that lot question bringing on market? mid-scale a is that may than this the market cost comment and to lower in you the willing contract that for? is are made

Jack Fusco

have for we've we deep few grow you businesses and to think with we strategy strategy, strategy, been our positive. any I’ll changes. gotten years over very results is having our recently. been our have the major conversations runway and able need our looked our very achieve any long shareholders are the execute our past ability extremely tell at We customers to our with think big to pleased We make our to our don’t business that – and and

So feel like we head our down. are points

it tried construction easy. we’ve perform and engineering large a to So continue look extremely outperform. hope are make very projects These It's and over complicated business. and we to to

Jean Ann Salisbury

you. That’s me. for helpful. That’s Thank all

Operator

take James. Raymond And we’ll Pavel with next from our question Molchanov

Pavel Molchanov

not U.S. of taking as in, least to China curtail sign curtail I in the of more there preemptive question. any a latest they came you crude China either measure. were of purchases to if there effectively buyers One that to the the LNG? that U.S. for oil China on of the about Thanks is Have some crude statement was may. for trade pressure contracts LNG or being seen a instructed any at evidence political buyers by LNG Even in additional tariffs before purchases

Jack Fusco

No, important very it's us. I we mean for market haven't. a

know opened office. a you Beijing we've As

hope Beijing the can continue in through work we're are and to than ever folks the busier that two towards we're try going we and countries think our that to work So end. we solution rapidly to and differences

Pavel Molchanov

of project The have a have go becomes What landscape. up LNG you some geared future the as do competitive America effect follow or been industry China development Greenfield the the on on think whether projects part does that towards North customer? foreseeable would this overseas tariff in of that of supposing of for away it kind then moment a kind not and And the the landscape. Okay. a in

Jack Fusco

won't billion overall. reap construction we're Yeah, can infrastructure for through effort. and we I'm affect now that effort glad Cheniere. just that it lot that the But $XX there's on right with headwinds rewards a of

You've got tariffs. still

rising interest rates capital these projects. have are and intensive very You

on focus matter, impact our that if it's So I it's going know but not don't a – would push. it China for big to plans. won't I just growth

Pavel Molchanov

All guys. right, it appreciate I

Operator

further speakers And time it would turn any queue. in no concluding our to questions this appears to have we over call remarks. for back the like I At the

Jack Fusco

I the I Cheniere just want you their for safe to thank everybody summer. rest support of and wish Thanks. a of

Operator

today's We concludes conference. appreciate participation and ladies again Once gentlemen today. that your

Cheniere Energy Partners (CQP) 9 Aug 182018 Q2 Earnings call transcript