Cheniere Energy, Inc. (AMEX:LNG) Q2 2023 Earnings Call Transcript - Page 4 of 6 - InvestingChannel

Cheniere Energy, Inc. (AMEX:LNG) Q2 2023 Earnings Call Transcript

So I wouldn’t keep score quarter-to-quarter. But if you want to, this is the first quarter that share buybacks was higher than debt pay down. And if you think about the $4 billion program for three-years, we have gone through 30% of it in about 25% of the time. So we are on pace to do that ahead of schedule. That is the plan. And again, what is most important is we are going to get to that $20 per share run rate cash flow ahead of time and buy back 10% of the market cap over time. So it will play itself out. But we are not dollar cost averaging here with our free cash flow. So it wasn’t ever going to be in such a way as you referenced.

George Burwell: Okay. Now certainly, all fair points. Maybe just to follow up on Jack’s comments about the confidence on CCL3 volumes possibly coming on a little bit earlier than expected. I mean what supports that confidence? I mean I understand that the project is 38% complete and the construction is 5% complete. How do you see that progressing? And again, like what drives the claim that volumes can come on early?

Jack Fusco: I get a weekly construction report, and I was out at the site myself. There is over 1,000 people there. There is over 10,000 pilings have been installed. Train 1, it is concrete, over 50% complete. The steel is being erected on the [indiscernible]. So as I see that progress is way ahead of schedule. And I know that we have some very critical components for Train 1 that are – have been shipped. They just haven’t been received. So I think on the next call, you guys will get a much more fulfilling update on the schedule, but that is what gives me my optimism.

Operator: Our next question comes from Ben Nolan with Stifel.

Benjamin Nolan: I guess I will put both of these into one. There has been some issues with congestion and water levels and that sort of thing around the Panama. Now I’m curious if that is impacting how you guys are managing your book? And then also, there is a lot of speculation there is likely to be a pretty high increase in – or upward movement in freight costs into the back half of the year. Curious where your freight book looks like at the moment.

Anatol Feygin: Yes. Thanks, Ben. So you are absolutely right. The Canal has had an issue with drought. Clearly, it is something that we are very close to, the canal is very good partner, and it is – it continues to be a good partner and will be for decades to come. Equally, obviously, Europe has been the market of choice. So that does not affect us nearly as much as it would have. And we also have the capacity to address that by going around instead of through the canal, which obviously takes longer, but equally obviously saves you the transit fees on the canal. So all of that is included in our guidance and in our economics, and we do look forward to continuing to work with the canal and finding good solutions there. And in terms of costs, you are referring to sort of charter rates as they continue to be elevated in the back half of the year, driven primarily by the contango into Europe.

And of course, as you know, we have our requirements fully covered and our shipping position reflects that.

Operator: Our next question comes from Craig with Tuohy Brothers.

Craig Shere: And I understand Trains eight and nine for Corpus are significantly hedged on some costs. But we are hearing more and more about EPC price inflation post Port Arthur and Rio Grande FIDs. And I wonder if you could opine on the broader market trends in terms of – we used to be looking at six times EBITDA in projects, now maybe somewhere in the seven times might be more reasonable, but some peers might be pressured even at eight times. In terms of peer FIDs, the pressure on the market and how you would think about economics and hurdle rates for SPL Stage 5, can you kind of give us your thoughts?

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