Cheniere Energy Partners, L.P. Q3 FY2022 earnings call

Operating and Financial Highlights

• Generated consolidated adjusted EBITDA of ~$2.8B and distributable cash flow of ~$2.0B in Q3. Had daily production records, including a daily record at Sabine Pass of ~5 TBtu of LNG.
• Corpus Stage 3 project with Bechtel is making good progress, having invested ~$1B to date, with long lead time equipment ordered and manufacturing to start before year-end.
• Sabine Pass third marine berth commissioning completed ahead of schedule, providing increased flexibility for marine loading operations.

LNG Market Update

• Volatility in LNG market driven by supply-demand pressures, but Cheniere's business is highly contracted, insulated from price swings. U.S. LNG has become Europe's top supplier, with Cheniere's facilities contributing significantly.

Organizational Announcement

• Corey Grindal promoted to Chief Operating Officer, effective January 2023, with his extensive experience in gas procurement and trading being a key asset.

For the third quarter, Cheniere generated consolidated adjusted EBITDA of approximately $2.8 billion and distributable cash flow of approximately $2.0 billion. In terms of LNG volumes, 156 cargoes of LNG were produced and exported from facilities, with approximately 70% of that volume landing in Europe. Revenue contribution details weren't explicitly broken down by product segment beyond LNG operations.

2022 Guidance

• Reaffirmed full-year 2022 EBITDA guidance of $11 billion to $11.5 billion and distributable cash flow guidance of $8.1 billion to $8.6 billion, tracking to the upper half of these ranges.

2023 Guidance

• Will provide full-year 2023 EBITDA, DCF, and CQP distribution guidance in February. Forecasts ~150 TBtu open volumes in 2023, with a $1 change in market margin impacting 2023 EBITDA by approximately $130 million. Anticipates ~$1.5 billion in CapEx related to Corpus Christi Stage 3 in 2023.

• Volatility in global gas and LNG markets due to short-term supply-demand pressures. - Geopolitical conflicts impacting European gas supply and related market dynamics. - Inflation and rising interest rates posing challenges for project FID and cost management. - Regulatory and permitting hurdles for new LNG project developments.

Q: Can I ask a little bit about timeline for Stage 3 and maintenance at Sabine Pass?

A: Jack noted Stage 3 is progressing well with no early revision to schedule, and Zach mentioned Sabine Pass has a 6-year maintenance cycle with major maintenance planned for 2023 offsetting some production but expected to be balanced by other trains.

Q: Thoughts on liquefaction fee environment and marginal cost of new supply?

A: Anatol stated expectations of trends playing out, with competition among U.S. developers anchoring buyer expectations in the lower margin range, while Zach noted inflation impacts on operating expenses but highlighted stability of run rate cash flow due to built-in escalators in SPAs.

Q: Thoughts on contracting and European logistics for 2023?

A: Anatol mentioned Europe's infrastructure issues being addressed but continued challenges with gas supply, while Zach discussed ongoing contracting efforts and reserving volumes for origination, with Europe being a market but Asia as a primary growth driver.