Good morning and welcome to the Cheniere Energy Inc. Third Quarter 2019 Earnings Call and Webcast. Today's conference is being recorded. And at this time, I would like to turn the call over to Randy Bhatia, Vice President of Investor Relations.

Thanks operator, good morning everyone. And welcome to Cheniere Energy's third quarter 2019 earnings conference call. The slide presentation and access to the webcast for today's call are available at cheniere.com. Joining me today are Jack Fusco, Cheniere's President and CEO; Anatol Feygin, Executive Vice President and Chief Commercial Officer; and Michael Wortley, Executive Vice President and CFO. Before we begin, I would like to remind all listeners that our remarks including answers to your questions may contain forward-looking statements, and actual results could differ materially from what is described in these statements. Slide 2 of our presentation contains a discussion of those forward-looking statements and associated risks. In addition, we may include references to certain non-GAAP financial measures such as consolidated adjusted EBITDA and distributable cash flow. A reconciliation of these measures to the most comparable GAAP financial measure can be found in the appendix of the slide presentation. As part of our discussion of Cheniere Energy Inc's results, today's call may also include selected financial information and results for Cheniere Energy Partners LP or CQP. We do not intend to cover CQP's results separately from those of Cheniere Energy Inc. The call agenda is shown on Slide 3. Jack will begin with operating and financial highlights, Anatol will then provide an update on the LNG market and Michael will review our financial results and guidance. After prepared remarks, we will open the call for Q&A. I will now turn the call over to Jack Fusco, Cheniere's President and CEO.

Thank you, Randy, and good morning everyone. I'm pleased to be here today to discuss our results and accomplishments for the third quarter 2019 as well as our outlook for 2020 which we expect to be a record setting year for Cheniere. The third quarter was yet another quarter highlighted by achievements across multiple facets of our business and operations and across both of our world-scale LNG facilities. Please turn now to Slide 5. For the third quarter, we generated consolidated adjusted EBITDA of $694 million and distributable cash flow of approximately $200 million and revenue of approximately $2.2 billion. We reported a net loss attributable to common stockholders of $318 million for the quarter, which was impacted by non-cash derivative losses and an impairment to our investment in the Midship project, and certain other items that Michael will discuss in a few minutes. Looking forward to the rest of the year, we continue to expect our full-year 2019 consolidated adjusted EBITDA to be in the range of $2.9 billion to $3.2 billion and we expect distributable cash flow to be between $600 million and $800 million. For 2020, we expect significant growth in our financial results as compared to 2019 and today we're introducing 2020 guidance for consolidated adjusted EBITDA of $3.8 billion to $4.1 billion, distributable cash flow of $1 billion to $1.3 billion and a CQP distribution of $2.55 to $2.65 per unit. Michael will cover our financial results and guidance in more detail in a few moments. During the third quarter, we signed our second integrated production marketing or IPM transaction this time with EOG Resources, providing additional commercial support for Corpus Christi Stage 3. Under the terms of this deal, Cheniere will purchase 140,000 MMBtu of natural gas per day from EOG for price linked…

Thanks, Jack and good morning, everyone. Please turn to Slide 9, 2019 has continued to be a year of substantial global LNG supply growth, after adding a record 12 million tons of supply in the second quarter, another 10 million tons of supply was added in the third quarter. Full-year 2019 is on pace to add about 40 million tons of supply, which will be a new yearly record. This year’s supply growth has been driven largely by U.S. projects, including our projects, with substantial completion achieved for Corpus Christi Train 1 and Sabine Pass Train 5 in the first quarter and for Corpus Christi Train 2 in August. Other U.S. projects have also reached recent milestones, as Freeport Train 1 exported its first cargo in September and the first train in Island recently entered commercial service. Incremental supply during the third quarter was absorbed primarily by Europe. The region continued its global balancing role as we also saw in the first half of the year, Europe imported a record 18.4 million tons during the third quarter, nearly double the import level as compared to a year-ago. As this year's rapid supply growth has outpaced Asian demand growth, pushing incremental supplies to Europe and driving down spot prices. We've also seen a convergence of European and Asian spot gas prices. The spot price markers most commonly used in Asia and Europe, JKM and TTF respectively, have occasionally shown some deviations, but generally spreads between the two have narrowed as compared to previous years. In contrast to the decrease in TTF, and JKM prices, Brent equivalent pricing continued to diverge and generally traded above the $10 and MMBtu level during the third quarter, more than three times higher than Henry Hub and almost double TTF and JKM levels. Please turn to…

Thanks, Anatol, and good morning, everyone. Turning to Slide 13, for the third quarter, we reported a net loss of $318 million, consolidated adjusted EBITDA of $694 million and distributable cash flow of approximately $200 million. For the nine months ended September 30, we reported a net loss of $291 million, consolidated adjusted EBITDA of approximately $2 billion and distributable cash flow of approximately $520 million. As Jack mentioned during the third quarter, net loss was negatively impacted by an impairment of approximately $80 million to our equity investment in the Midship project. This is due to cost overruns and extended construction timelines at the Midship project resulting in a production of the expected fair value of our equity interest. Net loss for the quarter also included an approximately $140 million non-cash loss from changes in the fair value of commodity derivatives primarily related to our gas supply contracts, and an approximately $80 million non-cash loss related to interest rate derivatives. We exported 383 TBtu of LNG from our liquefaction projects during the third quarter, an increase of 22 TBtu over the second quarter, primarily due to incremental commissioning and operational volumes from Corpus Christi Train 2 which was completed and placed into service in August. We exported 20 TBtu of commissioning volumes during the third quarter related to Train 2. For the nine months ended September 30, we exported over 1050 TBtu from our liquefaction projects. For the third quarter, we recognize an income of 364 TBtu of LNG produced at our liquefaction projects consisting of 364 TBtu loaded during the quarter, plus 36 TBtu loaded in the second quarter, but delivered and recognized in the third quarter, less 36 TBtu sold on a delivered basis and in transit at the end of the third quarter. We also recognize…

[Operator instructions]. We will go first to Jeremy Tonet at JPMorgan.

Good morning.

Good morning Jeremy.

Thanks, want to start off with the 2020 EBITDA guidance. A very strong number it looks like there. And just wondering if you could share any more behind what assumptions are embedded there. You talk about a lot being hedged or being sold forward, and you talk about the sensitivity $1 versus $100 million, but just trying to see does that price deck being employed there, is that the same as the 2019 levels or is that where the strip set now or anything else that you could share us as far as the sensitivities that would drive the top versus bottom of that range?

Sure Jeremy. Hey, it's Michael. I'll start with production I guess for 2020 to be a big production year for us. Obviously we'll end up probably in the mid-30s in terms of NTPA for the year. We've guided the 4.7 to 5.0 per train, SPL will be at the top end of that range. That range was supposed to be a 20 year average. You know, building in all of the maintenance plans, next year is going to be a low mate. Certainly a low plan maintenance year for Sabine, so that'll drive a lot of production out of that facility. Corpus will be at the lower end of the range just given where it is and its ramp up. We have some debottlenecking efforts underway that should bear fruit over the next couple of years. But for next year, kind of at the lower end of the range. In terms of percent contracted and kind of EBITDA margin sensitivities, as we said in the remarks in 2020 will be about $7.5 million tons left in the CMI book down from 9.5, almost 10 this year. So down about 20%. Out of 7.5, as we said, you know, we've been actively putting that away. Of course CMI has a fair amount of long-term contracts in this book right now. So if you back that off and then back off all of the shorter term stuff that we've already put in place for next year, back off the financial hedges we have in place, you know, and that's down to something like a 100 TBtu left or about $2 million tons of unsold. So in terms of margin certainty for us next year, it's kind of in the mid-90s percentage range. So you know, we feel like 2020s generally put the bed on the margin side. So don't expect really much sensitivity next year. We say a dollar move as a hundred million dollars. to the extent we get into the year, probably be in a position to tighten our EBITDA guidance range down once we get some of that behind us. But that's really the big driver for us at this point. And of course it's not very big,

Mid-90s that's a great to hear. Jack, just want to have a second question here as far as the stock price, I know that you've talked before as far as frustration and holders of the stock frustrated with the market seeming to not kind of recognize the stability in your cash flows. Just wondering how you think about that now, what levers you have to pull to try to address that or any thoughts you could share there?

Well, yes, Jeremy, over the long-term, I think our capital allocation strategies is the right one. So, when we see weakness in the stock price, as you can tell from the queue, you know, we're aggressively buying up there. We don't need to sell stock for to raise capital or our plans call for us to generate cash that we can reinvest in the business for our expansion plans and we'll pay down our debt to get our balance sheet and we're going to be continued to be very opportunistic about buying back our stock.

Yes, that's helpful. That's it for me. Thanks.

Thanks.

Moving next to Christine Cho at Barclays.

Good morning everyone. The $1 change in market margin changing your 2020 EBITDA by $100 million was helpful. Are you willing to share with us what the average marketing margin is assumed in your guidance after factoring in, all the longer term and short term and financial hedges you've put in? I ask because you know, the 2020 guidance that you gave is the same as the seven train run rate guidance that you gave at your Analyst Day couple of years ago, which you know obviously makes sense because you're running seven trains. But I think in that analysis you had assumed 250 as your CMI margin. So I'm just trying to get a sense of how far off we’re from that initial metrics?

Yes. Hey Christine, it's Michael. I mean you got it. We're not getting 250 obviously the books more like a little under two next year. So that's the headwind versus the guidance we put out. Of course that's offset by the fact that production is much higher than we thought it was going to be back when we put out that guidance in 2017 and updated in 2018. And then the other thing I'll point out, it's kind of along the same lines. The run rate guidance assumed a full year of Train 2 where the next year, obviously we only have until starting in May in terms of DCFD. So all those puts and takes equal out to us being able to stay in that guidance.

Okay, great. That's helpful. And then, earlier this year I saw that CMI entered into an agreement with SPL for up to 20 cargos this year, the standard of 115% of Henry Hub plus $2 per MMBtu. My guess is this was driven by trying to create more stability for CQP versus the standard 80-20 sharing agreement you have. But should we think that these sorts of agreements like might continue into the future if spot prices are low or volatile or did it just make more sense for 2019 because you had higher than normal spot exposure?

Christine, this is Jack. So there's a couple of reasons, and you've touched upon all of them. One is, we feel that CQP gets rewarded on its share price for having stability and its cash flows and this helped deliver that. It also helps us at CMI, cover some of our positions and have some certainty on that price of what that is. So you should expect us to continue to try to work closely and collaboratively with our Board at CQP as well as CMI to make sure that those deals are a win-win for both parties.

Okay. So we shouldn't be surprised if we see like this kind of continue going forward?

No, you shouldn't be surprised.

Thank you.

Our next question comes from Ben Nolan at Stifel.

Great. Thanks. So my first question relates to something that came up on the BP conference call earlier this week where they indicated that they thought the global gas market was oversupplied and that there was pretty strong chance that, if some of the U.S. capacity might actually need to be backed off a little bit or operate at lower utilizations to help balance the market, and curious if you guys see the same thing or if there might it – how that might play out if there are other locations around the world that might come off first perhaps.

Ben, this is Jack. I'll all start off and then I'll ask Anatol to give his opinion and it never ceases to amaze me that we keep getting this or having a conversation of U.S. LNG in the part that customers won't lift because we are extremely competitive worldwide. As Anatol mentioned, there's a lot of infrastructure that continues to be built in support of natural gas consumption worldwide. And we feel very, very good about our position in the woods world market in our customer's position on how they, how they are utilizing net gas in that overall cost of production. But - and it's all away.

Thanks Ben. Yes, just to fall on Jack's comments. Number one, this supply wave from 16 through next year is about $150 million tons as we said in the prepared remarks a little over $20 million tons left to go. So the global LNG market today is about $360 million, $370 million tons sort of current monthly run rate, that's 50 B's a day or so. Our gas supply team, Corey takes about 5.5 BCF of gas to our plants alone. The U.S. has is 7.5. So, number one, I think we're much closer to the end of the supply of wave obviously. The question of how quickly the world absorbs that it is in part whether, but certainly we fully expect the emerging markets and actually old World Europe to continue to grow and have fundamental demand growth, and number two, you switch off 15% of global supply it is going to have quite an impact on the Henry Hub here and LNG prices globally. So we don't expect that to happen. We think it's very rapidly self-correcting and of course, the LNG world does not run off the spots spread, right. Neither physically nor financially. So we think there is a good chance that, we're in another 9 to 12 months of a steep contango, and as Michael discussed and Jack discussed earlier, we'll take advantage of that contango and secure margins for ourselves.

Great. I appreciate that color. I thought that's what you might say. The other question is about the guidance for 2020 and the EBITDA guidance this came up earlier is as you laid out in terms of the absolute numbers for seven train run rate. But, the DCF guidance was a bit different, which I thought was odd given EBITDA being the same. Any color as to what is happening on the DCF side relative to the EBITDA guidance.

Yes. Ben, it's Michael, thanks for asking that. I should have clarify that in the last question. So the only difference there is some of the same things I mentioned, 250 margin not a full year of DFCD Train 2, but the big one is Train 6 equity down at CQP. So remember we're 50-50 financing that train at CQP that results in slower distribution grow. So we're foregoing some distributions today, which is impacting our DCF, right? We only count what comes out of CQP to us, and CEIDCS. And so we're foregoing that today for much larger distribution later. So that's the reconciling item.

Got it. Appreciate it. Thanks guys.

Moving next to Julien Dumoulin-Smith at Bank of America.

Hi good morning.

Good morning Julien.

Okay. So perhaps just to follow up a little bit more in Christine's question, can you talk about some of the sort of, let's call it like this normalized guidance for the multi trained scenarios that you've released in the past. Obviously it was a little bit of a sort of largely in line, but a little bit of a discrepancy relative to that guidance, more on the cash flow side than the EBITDA side. Can you talk about some of those the puts and takes again a little bit more discreetly and then kind of apply that if you can for the other guidance levels that you've articulated for the future trains?

Yes, I mean, it's Michael again, sticking with all of the future train guidance, whether it's, the nine we rolled out and even the stage three preliminary guidance we gave on this year. Again it's those three items for EBITDA minutes. We're not getting 250, which is what's in there, but we have higher production, which is offsetting that, and we don't have a full year of the 350 contracts, which will come with the DFCD of Train 2. Those are both impacting 2019, but leaving us in the same place as the guidance you said in 2017 and DCS has the added difference of a Train 6 equity being funded by withholding distributions from us, which will ultimately come.

Got it. So nothing else, different on cost, et cetera. But if I can pivot a little bit, a different direction, maybe more of a Jack question. We've seen dominion out there selling down a stake in their business of late, obviously more discreet to them in their long-term financing decisions. I know that folks and you all just talked to at CQP, but I'd be curious to - could we potentially go back the other way with respect to Corpus Christi, and I know you guys are trying to simplify things, but at the same time, if you find these particularly attractive costs of capital out there that we've seen with some of your peers, is there anything out there on that? Any thoughts?

Yes. Well, Julien I have to tell you, congrats to Dominion. I mean, when we look at that and look back, they got 12 times, EBITDA for non-controlling piece of a LNG facility, which is fantastic for our complex overall. But, I think look different, owners of these LNG terminals will have a different needs, needs for cash. We're pretty pleased with our capital structure and our performance year-to-date and we're happy to give guidance side that is relatively consistent with what we told you we're going to do years ago and we're just going to keep plugging away at our business.

Okay. Fair enough. All right, thanks guys. I'll leave it there.

Moving next to Weber research and Mike Weber.

Hi, good morning guys. How are you?

Hi Mike.

Hi, Mike.

Jack, I just wanted to come back to the question around Dominion and maybe kind of think about that from a different angle. Maybe not in the sense that you guys need to offload CapEx to financial buyer but I guess, I don’t know it’s a great way to put this indirectly but if you just think about the multiple there that's implied for Dominion, it’s 12 times you mentioned for not controlling stake but Jack, I'm just curious in terms of how you think about that multiple relative to CQP and kind of the different aspects of it and how it's applicable to obviously what's happening with Corpus or with Sabine and a block that’s getting shop now? There is no great indirect way to ask that. So I'm just going to go ahead, man.

Yes, look we like both of our businesses. There is a significant spread as we all know, between how CQP trades and how LNG trades, and at some point, the market will figure out which one is right? And we will see what happens there, you can tell from our buyback program that, that, we continue to like buying back our LNG stock at these prices and levels. But I'm not going to get into trying to anticipate what one shareholder may do as far as their stock or their stock position and it really does not matter for us strategically. We continue to perform and execute in our business and that's where we're going to stay focused on is making sure that we hit all of our targets and we meet our commitments to all of you.

Got you. Appreciate that. A follow-up just more in the market in general and it’s a good one, I guess for Jack or for Anatol but just within the context of your ongoing conversations with the Chinese, just gives it a while now. I'm just curious on how have those conversations changed since the trade war started? And then I know we've probably picked up this in each earnings call, but any given point, the demand for LNG is going to be a zero sum game. But over time, you can definitely see value leakage and I'm just wondering, is there a point in time we've already seen the Chinese help underwrite Arctic two as I'm sure they're being aggressively out of West Africa. At what point do you think you start to see permanent market share loss from U.S. gulf as a result of tariffs? Specifically within the context of the Chinese bid?

Yes, so I'm going to take that in a couple of different ways. I mean, you just saw from Anatol’s presentation that it’s over, they've had over 20 million tons of growth year-over-year.

20%.

20%, 10 million tons of growth this year. So they continue to use more and more LNG, we continue to work very closely with our counterparts that are in China. They're very interested in securing more Henry Hub, the trade tensions have gone on a little longer than I think any of us have anticipated. And we continue to work with the administration and our counterpart parts in China to make sure that we're on the right side of relationship when are when things get better. So, I mean, that's been our position from day one, and it's the way we've conducted our business with China but Anatol do you have anything else to.

No, just to echo Jack’s comments, and Mike as you know, we're continuing to be very committed. We think it's a great opportunity. We want to support China, and it's ambitious to grow gas to 15% of its economy and cleaner skies and have affordable reliable solutions. So we are as engaged as ever and are looking forward to the right opportunities to consummate those.

Yes, I mean maybe the best way to ask is do you think that Chinese bid getting directed elsewhere is helped underwrite any projects that wouldn't have gotten done anyways?

No, I don't think any wouldn't have gotten done. I think everything has been dispatched to date that has China's involvement, our projects that we fully expected to be dispatched, whether that’s a pipe.

Got you. That's helpful. All right, guys, thanks for the time.

Thanks Mike.

And we will go next to Michael Lapides of Goldman Sachs.

Hey guys, thank you for taking my question. One operational one. Do you think and if you do, can you talk about what it would take to achieve this to be able to get above 5 million tons per year per train meaning is there incremental operational upside potential that may exist over the longer-term? And if so, how do you achieve it?

Yes, I do think, having worked closely with the operational team recently on our debottlenecking initiatives, I think, the debottlenecking plan that that they've put before us for some additional capital, we can achieve over 5 million tons if necessary, but I think what you're hearing from Michael is we're trying to do all of the low hanging fruit first do the debottlenecking that gets us as much LNG as we possibly can without having to invest large quantities of capital. But, yes, Michael, I do think we can achieve numbers above that.

You said something you think is in the kind of the next three to four years three to five year horizon or you thinking that's kind of a longer-term kind of target?

I think we will guide you appropriately when we get to that point. But for now we're sticking with our original 20-year guidance.

Okay. And then one follow-up and this may be more of a Michael question. How are you thinking about the balance? Like when you think about your debt capital structure between wanting to have bullet debt versus having amortizing debt and how you would go about changing that balance over time?

Yes, that's a good question. I mean, this foray to private placement markets and amortizing market and we like it, it helps us achieve some of our de-leveraging goals and kind of commits, commits us to it by entering into this, self-amortizing debt rating agencies like that as well. And the issue is that's not a giant market. So we're going to be a big bullet issuer for a long period of time and we'll opportunistically do these private placements when we can. So, yes, I mean, I think the larger part of our debt pay down is just going to be paying down debt when we have bonds mature. It'll be a mix. I couldn't give you a target.

Okay, thanks, guys. I much appreciate it.

Thank you.

And we'll go next to Craig Shere at Tuohy Brothers.

Good morning.

Good morning, Craig.

With respect to the unhedged equity cargoes, as we kind of add-up availability given the really good performance with Train 3 Corpus construction. Do any of your EDP, Trophy or Petrochina contracts have automatic step-ups Train 3 completion and a couple other quick ones, would any ultimately finalized Chilean LNG to power agreement be deployed for the first three trains of Corpus or more for Stage 3 and how much aggregate capacity upside you have on debottlenecking heading from 2020 to 2021 because you said most of those efforts aren’t going to be hitting next year, it's just that you have a low maintenance.

Okay, so there's three, there were three questions in the one, right, Craig, so the first one I'll take which was with the accelerated schedule for Train 3 and our performance, which as we all know, it's really our Train 8 and we should be getting better and better at it as we get more and more of these behind us. Do the contract startup or have the right to start-up early, the answer to that is no. Those early cargoes would be treated the same way we've treated them in the past which would be marketed by CMI affiliate. The second part of that was Chilean et cetera. All the other contracts for Stage 3 and I'll turn that one over to Anatol.

Just to follow-in on Jack’s answer, nothing steps up as a function of the trains coming on earlier but as you know, there are bridging volume components to some of the transactions and those do ramp until we get to the radical volume stage in the contract is just not train dependent, in terms of your question on Chile, we're finalizing that agreement. It's relatively modest in size. It'll be something that that is at CMI, it's on a on a delivered basis as you know, and will contribute to supporting our investment portfolio and has the flexibility for us to do with in essence as we please, with the contract being at CMI but it's very modest in size.

And for all of those additional contracts, whether they're the two IPMs which is Apache, and in EOG, or the CPC contract in Taiwan, we're trying to put a portfolio of contracts together that support the expansion of our facilities and that next expansion is Stage 3. And then I think there was one more question you had Craig in that long list.

Yes, the guidance was that you were looking good in 2020 on capacity because it's so low maintenance year, but that you're actually also working on activity debottlenecking efforts that weren't really going to hit mostly next year. So I was just asking about the trend of capacity uplift from debottlenecking from 2020 to 2021?

I don't know yet, I mean, we've raised our production range per train, three times and hopefully we can continue to do that over time. But for now, we're 4.7 to 5.

Okay, so perhaps with a little more year-over-year turnarounds or maintenance that might offset the debottlenecking. So we just assume that 2021 is about the same for Train as 2020?

I mean, that's fine for now. Yes, we'll see 2022 away, but I think it’s fine for now.

You also have another train starting up in 2021, which is Train 3 Corpus.

Right, but on a per train basis, just for now. We'll keep it static?

Yes.

Okay, thank you.

We will move next to Spiro Dounis at Credit Suisse.

Hey, good morning, everyone. Maybe just starting off on Stage 3, could you just remind us again, how you're thinking about the sizes of that FID, I believe at one point, you kind of left the door open, so maybe a partial FID. So just wanted an update on maybe your current thinking around that. And if you could maybe tie it to Anatol’s confidence here, and maybe what that next set of contracts looks like as we go forward?

Yes, thanks, Spiro it’s Michael, I think we're still open to the possibility of different kinds of FIDs for that project. It's a seven train project of mid-scale, it could probably be five as we look through the numbers, but ultimately, the market will dictate that as you mentioned, so I'll turn it over to Anatol.

Yes, thanks Spiro, Michael. Yes, so as you guys know and Jack mentioned between EOG, Apache and some of the things we have in the portfolio, each one of these trains is, ballpark 1.5 million tons. So there's no, there's no reason to even discuss a three train solution, but it's possible as Michael said that, that is, 5F7.

Okay, fair enough. I appreciate that. And then second one, you talked about it little bit, but just maybe getting more specific around Europe and the storage situation there. What do you ultimately think sort of resolve that issue going into next year, is it pretty much close to capacity as we could sort of go through the seasonality? I know Anatol you mentioned some tailwinds. But is that kind of enough to help that market absorb another year of U.S. imports? And what does that ultimately mean for the ARB in 2020?

Yes, it’s a great question and fair point, right. We don't reset to zero and have Europe able to grow from this space by another 20 million tons plus, that's very fair point. One of the things that has played out is fewer lower volumes on pipes as a function of North African and European supply. Norway's been down pretty significantly. We need a winter cleans us up faster, we have had very robust demand growth on the power gen side. So that is something that is not, not dependent on seasonality, and is back half of 2019 weighted as everything was put in place and as Europe continues to grow that that demand function. So all those help, again, 2020 will be a very big supply year, right. There's no question, big supply year on a run-rate basis. And of course, you get the full-year effect of the 40 million tons coming on in 2019. So, we're not, as you can tell, we're not that optimistic on 2020 and as Michael said, we've got more or less everything we can have put away by the way. My point is that that's beyond 2020. There really is no meaningful supplies, literally a couple trains for a number of years with most of those being our trains. So fairly confident that 2020 is the transition year and 2021 through 2023 look much better.

Understood, appreciate the color. Thank you, gentlemen.

Thank you.

And we'll hear next from Shneur Gershuni at UBS.

Hi, good afternoon, everyone. Just wanted to touch on a couple of quick questions here since most of my questions have been asked and answered. I was wondering if you can talk about the path to investment grade at the LNG level. I noticed you've had a lot of positive rating actions at the subs. Is it 2020 a reasonable timeframe to think towards the end of 2020 that you can see IT across the board? Or is 2021 a more realistic target?

Thank you, we have Michael.

Yes, no it's not going to be next year. I mean, look, what we've said it's a multi-year progression. It's going to take us a while to get down to this high horse number that we're targeting. And if agencies are going to give us credit for getting there before we get there, but that's not next year. And the two-pronged deleveraging strategy, doing Stage 3 at 50% debt equity is highly deleveraging for us, we got to get that done. And then the balance is just straight that debt pay down, which will happen as the money comes in. And so it's not next year, and we'll see if it's the following year or even the year after that, but that's the best we know right now.

Okay, that makes total sense. And one other question, appreciate the fact that you've pre-sold your marketing for next year and you're effectively at 95% sold out, and trying to upgrade the quality of the earnings from an investor perspective. I'm just wondering if that's going to be the strategy going forward that when we have this call next year, you'll also be in a 95% sold out position and we can sort of think of it as a more ratable business than it's historically been treated?

Absolutely. You should expect us to manage the business appropriately and not take a lot of commodity risk if we don't, if we don't have to do so. And I'm not giving, I won’t say that 95% is our target, but you should expect us to be prudent and disciplined.

Perfect, really appreciate the color guys. Have a great weekend.

Thanks Shneur.

We will go next to Evercore and Jon Chappell.

Thank you, good morning guys. Michael, one of the key tidbits you gave on the last conference call was the cadence around the buyback up until that point, there was only 3 million in the 6/30 financials but you had said that you'd bought up to $100 million at that point in August. Is there any clarity you can give on what you've done since the end of the third quarter. I know we're only on November 1, but first 31 days?

Yes, I think we're going to get out of the habit of given those updates and just wait for the Q to come out. And we were kind of our first report after starting the program. And so we made an exception last time, but I think from here on out, we’ll rely on the Q.

Okay, that makes sense. And then just a follow-up to one a couple ago, maybe to Anatol, on the -- are you thinking CC 3, it sound I mean Jack's confident as ever FERC EPC, it sounds like we may even have an update on that by the time we speak to you next, is there a percentage threshold on SPA that you're thinking about before you actually trigger FID and also kind of a Part B to that? Do you view IPMs exactly similar to an SPA or they not quite kind of like the long-term contracts in your view?

Hey, it's Michael. Yes, I mean, on the second question I mean for us, they’re very similar. I think they count as underwriting an investment. And then the first question was how much do we need to be sold and we never have really targeted a number we're trying to underwrite our economics on a contracted basis, it’s kind of underwriter downside case. And so that's always how we've looked at it. But having said that, it'll be similar to our previous projects, two-thirds 85% contracted just depending on the economics.

We could sell one molecule of couple billion dollars, we'd be done.

I'm sure you're on that, Anatol. Michael, just to be clear, you said you view them kind of similarly, the discussions you've had with banks, as far as underwriting the projects, do, I assume they view them exactly similarly as well?

I think for us, yes, yes. I mean I’m not sure that's the case. If we were, six, seven years ago, but for now, and I just think where we are yes, that is the case.

Okay, that's helpful. Thanks, Michael. Thanks Anatol.

Let's take our last question today from Alex Kania at Wolfe Research.

Thanks. I'm at risk of, I guess, getting ahead of myself here a little bit. Jack you just mentioned, expanding a little bit more upon kind of longer-term growth opportunities, presumably beyond Phase 3 at Corpus. I'm just wondering if that's kind of arising from just broader commercial discussions you're having with people right now, in terms of what the opportunity set is, was it very long-term, or is it just hey we're pretty close to getting Phase 3 in the next, let's say, six to nine months. And so, we're kind of thinking about what's further on. I’m just kind of curious how kind of how really you see that right now?

Yes, thank you. No, I think, it's a combination of things. One is, we're very close to securing another close to 500 acres of property contiguous to our Corpus site. So that'll give us more land and birthing capacity, because it happens to be waterfront and that that transaction should get done early next year. And that really opens up the possibility for quite a bit of additional expansion at Corpus. And the second part of that is the commercialization efforts. As we've said, there's just a lot of interest in that site and its location to the Permian and trying to evacuate some of this associated gas that's going to be coming in greater and greater quantities from the Permian. And then thirdly, with the infrastructure that we already have there, our additional expansion plans should be extremely competitive worldwide with any other options that that utility customers have. So we're very, very focused on Corpus. We do feel like Stage 3 is going extremely well. And we're looking for Stage 4 and beyond.

Great. Thanks very much.

Thank you, Alex and thank all of you for your support of Cheniere.

And ladies and gentlemen, once again that does conclude today’s conference and again, I would like to thank everyone for joining us today.