Cheniere Energy Partners, L.P. Q2 FY2024 earnings call

• Entered into a new long-term SPA with Galp for approximately 0.5 million tons over 20 years, linked to the second train of the SPL expansion project. - Second quarter results exceeded expectations owing to operational excellence across the Cheniere platform. - Conducted major maintenance programs at Sabine Pass and Corpus Christi, which were completed on or ahead of schedule, with zero reportable environmental incidents and zero recordable or lost-time injuries. - Stage 3 at Corpus Christi continued construction progress, reaching over 62% completion in June, with a headcount of about 4,000 construction workers, and targeting first LNG from Train 1 by the end of 2024 and the first three trains online by the end of 2025. - Activated hurricane preparedness plans at both facilities prior to Hurricane Beryl, with uninterrupted safe and reliable production during the storm. - Corpus Christi surpassed 6 million man-hours worked without a single lost time incident, and Sabine Pass exceeded the 10 million man-hour mark.

In the second quarter of 2024, Cheniere Energy generated consolidated adjusted EBITDA of approximately $1.3 billion, distributable cash flow of approximately $700 million, and net income of approximately $880 million. Total LNG production across the platform saw a slight year-over-year increase for both the quarter and the first half of the year. Approximately 93% of the LNG volumes recognized in income during the second quarter were sold under long-term SPA or IPM agreements with initial terms exceeding 10 years.

• Raised and tightened the full-year 2024 guidance ranges to $5.7 billion to $6.1 billion for consolidated adjusted EBITDA and $3.1 billion to $3.5 billion for distributable cash flow. - Primary drivers of the increase include portfolio optimization activities and excellent maintenance execution, particularly at Corpus where expected to make up for lost production from first quarter freeze-related gas composition issues. - There remains an immaterial amount of unsold volume for the rest of the year.

• Potential hurricane impacts on production at the sites. - Weather-related disruptions to gas composition and production. - Uncertainty regarding changes in the tax code, specifically concerning the taxing of unrealized derivatives.

Q: With the progress made year-to-date, could you provide additional color on the drivers underlying the low versus high end of the updated guidance range?

A: Zach Davis stated that there was an incremental $100 million added to EBITDA due to post-maintenance production increase at Corpus, along with factors like Henry Hub variability, hurricane impacts, and year-end delivery timing.

Q: Could you provide an updated view on the regulatory and permitting landscape, especially regarding competitor projects?

A: Jack Fusco noted that Cheniere's permits for SPL and Corpus projects are no longer subject to appeal and the company has developed permit applications robustly to satisfy regulatory requirements.

Q: How sensitive is Asia demand to the broader macro cycle, especially with China's recent slowdown?

A: Anatol Feygin mentioned that Asia's dedication to gas is sustained and durable, with emerging markets in South and Southeast Asia being eager for gas, and supply constraints shifting to 2026-2027.