Good day, and welcome to the Third Quarter 2025 Cheniere Energy Earnings Call and Webcast. Today's conference is being recorded. At this time, I would like to turn the conference over to Randy Bhatia, Vice President of Investor Relations and Communications. Please go ahead.

Thank you, operator. Good morning, everyone, and welcome to Cheniere's Third Quarter 2025 Earnings Conference Call. The slide presentation and access to the webcast for today's call are available at cheniere.com. Joining me this morning are Jack Fusco, Cheniere's President and CEO; Anatol Feygin, Executive Vice President and Chief Commercial Officer; and Zach Davis, 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 to the slide presentation. As part of our discussion of Cheniere'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 Zach will review our financial results, 2025 guidance and initial outlook for 2026. 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. Good morning, everyone. Thanks for joining us today as we review our results from the third quarter of 2025. I think we can all agree that this year has been one of the more challenging with geopolitical unrest, rising cost and unsufficient supply chains, tariffs and now a government shutdown. My focus has been to lead Cheniere by putting our heads down, driving our growth strategy forward, continuing to deliver on operational excellence, executing on construction management and implementing our capital allocation program. The third quarter of 2025 was once again marked by many key successes across our entire business. We made significant progress on the expansion of Corpus Christi Stage 3. We progressed our development plans for engineering and commercialization of our expansion at Sabine Pass, all while continuing to achieve operational milestones, solidifying our reputation as a reliable supplier and partner to our global customer portfolio. The third quarter also gave us an opportunity to invest meaningfully back into ourselves with our share repurchase program for the benefit of all Cheniere stakeholders. In the LNG market, events and data points on both the supply side and demand side of the equation continue to fuel noise and volatility. But Cheniere's disciplined approach in our highly contracted business profile enable us to reliably deliver visible, predictable results in line with our previously issued forecast. We're very pleased to announce this morning that substantial completion of the third Train of Corpus Christi Stage 3 has been achieved, an acceleration of our forecasted time line from only a few months ago. I have more to say on Stage 3 in a few minutes, including on our recently improved time line on Train 4. Please turn now to Slide 5, where I'll highlight our key results and accomplishments for the…

Thanks, Jack, and good morning, everyone. Please turn to Slide 8. Global LNG demand in the third quarter of '25 was once again underpinned by European imports amid continued softness in Asia, resulting in price differentials that incentivize the flow of U.S. cargoes to Europe throughout the quarter. Unlike earlier in the year, when geopolitical events drove volatility in global gas prices, both the JKM and TTF benchmarks remained largely range-bound during the third quarter as compared to both the second quarter of '25 and the third quarter of '24. Despite an increase in LNG supply as new liquefaction capacity comes online and in light of the relative moderation of Middle East intentions that caused gas prices to increase late in the second quarter, global benchmarks remained relatively flat in the third. Monthly price settlements during the quarter averaged $12.50 an MM for JKM and $11.27 an MM for TTF, both relatively unchanged year-on-year. This is a clear indication that the market remains somewhat tight throughout the first half of '25 and into the third quarter amid lower Russian gas deliveries year-on-year and much higher European underground storage injection requirements. This dynamic persisted into the third quarter despite an increase in global LNG supply and more moderate Asian LNG demand which were unable to offset structural decreases in Russian pipe gas and meaningfully higher European injections as compared to '24. Ultimately, these dynamics provide a floor for global gas prices in the third quarter maintaining price levels throughout the quarter, which contributed to muted price-sensitive Asian demand aside from a temporary uptick in August, driven by early restocking. In the near to medium term, we broadly expect spot LNG prices to moderate as global balances begin to loosen in the upcoming period as additional liquefaction capacity comes online. As we've…

Thanks, Anatol, and good morning, everyone. I'm pleased to be here today to review our third quarter 2025 results and key financial accomplishments, our financial guidance ranges for 2025 and our preliminary outlook for 2026 LNG volumes. Turn to Slide 12. For the third quarter of 2025, we generated net income of approximately $1.05 billion, consolidated adjusted EBITDA of approximately $1.6 billion and distributable cash flow of approximately $1.6 billion. Compared to the third quarter of 2024, our 2025 results reflect higher total volumes of LNG produced across our platform, primarily as a result of the substantial completion of mid-scale trains 1 and 2 at CCL Stage 3 and higher total margins as a result of increased cargoes that CMI was able to sell in the spot market opportunistically earlier this year. As Jack mentioned, we navigated some operational volatility this quarter, primarily related to feed gas composition variability across both facilities. However, these impacts were partially offset by the ongoing acceleration in the commissioning and start-up of the CCL Stage 3 project. Looking forward, we expect to continue deploying solutions to build resiliency against production variability and bolster our operation reliability year-over-year as well as bringing the remainder of the Stage 3 trains online safely and ahead of schedule. We have generated approximately $4.9 billion of consolidated adjusted EBITDA and approximately $3.8 billion of distributable cash flow in the first 9 months of 2025 supporting our confidence in our guidance ranges, for the full year, which I'll address on the next slide. During the third quarter, we recognized in income 584 TBtu of physical LNG which included 581 TBtu from our projects and 3 TBtu sourced from third parties. Approximately 93% of our LNG volumes recognized were sold in relation to term SPA or IPM agreements. During the quarter,…

[Operator Instructions] We'll take our first question from Jeremy Tonet with JPMorgan.

Just want to start off, I guess, Zach, here with the buybacks, quite the pace this past quarter here and granted it's opportunistic in nature, but just wanted to see any thoughts you might be able to share with regards to the pace of the trajectory going forward, given what you've been able to accomplish so far?

Sure. Thanks, Jeremy. Yes, it was our second $1 billion quarter that we've had since we've initiated buybacks a few years back. And I think there's three dynamics to it. It's first liquidity and as you could see in just the cash balances, we started this year with over $3 billion and the fact that all of our revolvers are open, and we still have the Corpus term loan for CapEx of over $3 billion. We had more than enough liquidity. Then it gets into valuation. And honestly, if you look at these valuations, forget about where it is today even where it was in Q3. We're basically buying back the stock at an EV to EBITDA that's significantly lower than the CapEx to EBITDA of every other FID project that's occurred this year. And then on top of that is just performance. So as you can tell, the buyback is there, alive and ready to support the stock and our conviction of the long-term value of this company and those decades of contracted cash flows. So going forward, expect more of the same. This buyback program of $4 billion was supposed to go through '27. Basically, we're on target to need to go back to the Board and ask for an upsize next year. So expect that, and we'll keep on trucking along, especially if we are valued at levels that we think are clearly below where the -- just the -- without any more growth, we can value the company and earn a really good return for our shareholders.

Got it. That's helpful. And Anatol, pivoting to the LNG market and picking up some of the commentary you put out there with regards to inflection point. I was just wondering if you might be able to comment a bit more on lower prices incentivizing demand, what type of demand within Asia, could you see there? How deep are those pockets? And the pricing range provided on Slide 10 on the right is a pretty wide range. Any thoughts, I guess, on how things could shape up versus the active forward curve versus some of the consultants?

Yes. Thanks, Jeremy. Look, we have gone through a multiyear period now with one of the largest disruptions to global gas supply and we've added order of magnitude 30 million tonnes to the LNG market, and now we're going to embark on more than half a decade of adding that much volume on an annual basis. So '26, we do think is a transition year, weather dependent. And obviously, it depends a lot on how some of those early price signals and demand elasticity play out. But the drivers for that gas demand, which we are very constructive on over the medium to longer term, right, we do think that not only does the LNG market get to that 700 million-tonne level by 2040, but also the gas market overall will have a robust growth period but it will be choppy. It will be things like power generation in China. You have over 150 gigawatts installed now. You have no issues with regas capacity that's -- that now has, I believe, 32 facilities up and running and will be 250 million tonnes of import capacity, just what's operating under construction. That generation fleet is grossly underutilized, and that could be a very substantial driver in and of itself. And as we've already said, the aggregate installed capacity is going to grow to 800 gigawatts in that theater. So that is a driver, but you'll also see industrial demand. You'll also see residential commercial demand. But the pace at which it absorbs this incremental supply will at times not match the supply timing. So that's the reason why we expect this volatility. And as Jack says, we'll continue to cheat and continue to contract the 95% plus of our capacity and let our investment-grade counterparties manage vast majority of that volatility.

We'll take our next question from Theresa Chen with Barclays.

With the EU moving forward to ban imports of Russian natural gas by Jan 1, 2026, do you think we could see upside to your marketing activities next year with 75 to 175 TBtu of unsold volumes as block leans further into U.S. LNG during the winter ahead?

Yes. Thank you, Theresa. This is Jack. As you know, we have tried to be very constructive and supportive of the EU and their energy needs. We've delivered over 60%. I think it's close to 66% of all of our cargoes over the last three years have went to Europe. I would expect that there's going to be other opportunities for us in Europe just based on our relationship with our counterparties there, 24 million tonnes of our contracts are with EU counterparties. And our relationship there is very, very strong. But Anatol, do you have anything to add?

Yes. Thanks. Well, Theresa, just not to be too precise, but six months for the short-term contracts, so that's April of next year, long term as of January of '27, which is one of the reasons why we think this winter, again, is a bit of a transition period. As Jack said, we stand at the ready to support our customers, obviously, have destination flexible volumes. As you point out, Russian LNG has supplied about 11 million tonnes year-to-date into the EU. So that volume will be most likely impeded. We don't think it disappears. We think it is a little bit less sort of utilization of the Arctic facilities, but ultimately, unfortunately, they will likely find a market, as you all know. So it is a little bit of the question mark over this coming winter. But again, it's order of magnitude 10 million, 11 million tonnes against the backdrop of 30 million and 40 million-tonne growth years.

Got it. And with the previous comments from Anatol about medium- to long-term demand elasticity in mind and tying it into your views on project commercialization given the onslaught of competing liquefaction project FIDs we've seen so far this year. How is Cheniere thinking about your own incremental capacity expansion from here beyond what has already been sanctioned?

Yes, Theresa, thank you. And we're going to stick with our Cheniere standards. So we're going to make sure that if we're going to invest additional capital into growth that it meets all of our financial hurdles. Those hurdles are very robust. I'll let Zach go through at least the 5 or 10 of them that he wants to, but we make sure that we are fully contracted that it meets our hurdle rates and that we're providing our energy to investment-grade counterparties over the long term. But Zach, do you have anything to add?

Sure. I'll just say we're going to stay to our lane and stick to brownfield LNG development and construction and operations and remain as disciplined as possible in a pretty undisciplined environment right now. So the plan, as we've said many times, is we're going to permit the heck out of the site. We're permitting 20-plus million tonnes at both Sabine and Corpus as we speak. That doesn't mean that's the intention of what will FID in the near term. What we have line of sight to FID in the near term is, first, Sabine, a first phase expansion that would be a train and some incremental debottlenecking equipment. And that project alone would need an incremental birth, tank or pipeline, and that should be as economic as possible. And with that said, we have a good amount of contracts already on the books signed with CMI that could be assigned to either project that basically cover us off for contracting for a first phase project at Sabine. And then instead for the fourth large-scale train at Corpus that's slightly behind in terms of the permitting schedule as we just FID-ed mid-scale 8 and 9. So we'll stick to the standard basically unlevered 10% returns. And not at these $5 margins that we see on the curve today and into next year but comfortably under $3. We're going to stick to the 6x to 7x CapEx to EBITDA at the same type of margin level. We're going to be 90% contracted to really lock that in and then be in a position where we can fund it 50-50 and be credit accretive. That's how we've done every project to date and have no intention of slowing that down.

We'll move to our next question from John Mackay with Goldman Sachs.

I wanted to start on some of the comments on the feed gas this quarter. Jack, I appreciate your walk-through on everything the team has done to kind of fix that. I guess if you can just talk us through what that looks like going forward. Are there investments you guys can make at the plans or investments upstream? Is it something more just process and it takes some time? Maybe just walk us through that one more time, if you don't mind.

Yes, John. Thank you. So first off, there's a lot of variability, right? Our biggest variability has always been weather. So we first had fog and a lot of fog at Sabine Pass. We built the third birth and we managed fog. Then it was hot and humid. And we've upgraded fans, and we've added windshield. So the team constantly surprises me and is able to make small capital investments to get through some of these variabilities. This -- lately, it's been the variability in the feed gas composition mostly from the Permian. So as some of the larger pipes have come across and have tied in Permian gas into Louisiana for lack of a better word, we've seen an increase in nitrogen and yes, there are things we can do to help minimize the nitrogen. But nitrogen is an inert gas, and it takes up space. And there's different ways to combat that. So at Sabine, we've seen the increase in nitrogen. We've changed processes to run it in what we call wet mode, which chills it and pushes it through our system a little more forgiving is what I'll say. And then secondly, minute quantities of substances in the gas stream when you're focusing billions and billions of cubic feet to one specific area. So 5 billion cubic feet a day to Sabine Pass or 3 billion cubic feet over to Corpus Christi minute quantities end up being very, very big. So we've seen some heavies. Those are C12 that -- or C12 pluses that are starting to freeze in our system before the liquefaction of the LNG. And that's where we've started to use different solvents to clean the heat exchangers, we've been defrosting a little bit more. But the team continues to figure out ways around it. And we have a long-term plan that we're going to implement next year to help us be much more resilient to small shifts in composition within the gas stream.

And I'll just add that as we gave preliminary and it's definitely preliminary production guidance for next year, we baked a lot of that in, in terms of -- there's some planned maintenance incrementally, in particular, at Corpus in the next year at least, that once we get through some of that, we could be in a position to potentially do better than, let's say, 1.5 million tonnes per train. But that's not something we're baking in, in October a year ahead before we've done much of that work. So some of those things are baked into the -- this initial forecast and clearly, we'll give financial guidance to the Street on the February call and have a better picture of where production is coming out.

That's clear. I appreciate that color. Just a quick one for me, Zach, following up on your comments a couple of minutes ago. Can you just remind us, at this point, kind of gating items for Sabine Train 7 specifically? And I understand there's a few more moving pieces, but like loosely speaking, what's your bogey for potential FID timing?

Sure. So we're deep in that FERC process and don't expect to receive that permit until later next year. And then and only then would we even be in a position to break ground and start officially reach FID. With that said, we could definitely start LNTPs to an extent with Bechtel next year to start locking in certain costs, if it all meets the hurdles again. So we're still working that through with Bechtel and development and ensuring that we can get to that, let's say, 7x CapEx to EBITDA or better level. And as we get closer to that, we're going to lock in some long lead items, spend some money down there, and you'll see still a tempered CQP distribution out as we retain some of that variable distribution to make sure the balance sheet is good to go for that project as well as to fund some of this CapEx before we even FID.

We'll take our next question from Spiro Dounis with Citi.

I wanted to start, Jack, maybe with some of your opening comments just around the trade outlook and some of the uncertainty there. I would love just to get your updated thoughts around trade relations, maybe how that's impacted your SPA and commercialization efforts. We know the President in Asia this week. So just curious if you're optimistic that maybe we could see some more announcements come through on the LNG side.

Spiro, thank you. And I am, I mean, it is nice to have a presence that's so enthusiastic about our product and what our product can do for the world. So at times, we need to manage that a little bit, but it's good to have somebody that's out there out in the forefront. I do expect to see more opportunities for us in Asia. Asia, as you know, is where we see a majority of the growth happening this next decade or two. And I see some opportunities there, which is why I have a trip to Asia. So -- but thank you, Spiro.

Yes. I appreciate the color there, Jack. Second one, maybe for you, Zach, on 2026 volumes. So first blush, they did look a little conservative to us, but it sounds like you're baking in some of that feed gas issue. So that could be it but also just wanted to get your sense for what you've assumed around the cadence for Trains 5 through 7, reaching substantial completion next year. Just especially you seem to have cut that time in half between first LNG and substantial completion. And there, I say, is there even a chance that we could see Train 8 sneak into 2026?

Do not put Train 8 into 2026 -- that out there. We're only, I think, 20-something percent complete with none of the construction as of this call. So the team is pretty incredible, but I'd rather than do it safely and get it right. So we are optimistic on Trains 5 through 7 to come online next year. And again, as we talk about the guidance range, we assumed a Train 5 in the spring, a Train 6 in the summer and a Train 7 in the fall we'll be more precise as we get closer to those dates, as we're right now very focused on the fact that Train 4 is getting closer to first LNG, and we'll see if that's end of year this year, substantial completion or early next. So again, we're optimistic if there's any acceleration on those trains that could help the production forecast as well. In addition to that, as you'll start to see even from Train 1 to Train 2 to Train 3 the time between first LNG and substantial completion keeps on shortening. That would also produce more P&L volumes supporting EBITDA next year as we continue to take advantage of the lessons learned, train to train to train. So more to come with that in February, but we'll leave it on the seasonal pattern for now for the next 4 trains to come online.

We'll take our next question from Brandon Bingham with Scotiabank.

Would just love to hear your thoughts as it's become more commonplace over the past couple of years to have market participants enter the LNG space from non-LNG arenas. Could you just discuss some of the impacts or even just the dynamics in contracting from having these non-LNG operators enter the market?

Well, I'll take a stab at it, I guess, this is Anatol. So this market a decade ago when we started, if you wanted to buy a U.S. Gulf cargo, you could only call one counterparty, and that was Cheniere. Now as this market surpasses 100 million tonnes on its way to 250 million tonnes you have a very, very different landscape, of course, and we've spoken about the kind of lack of discipline from our perspective, it seems like projects are getting over the FID finish line with a very broad array of counterparties and at times actually no counterparties at all. So it will be a very interesting and challenging dynamic as we go through the period of late this decade and first half of next. And again, that's why we are going to be sticking to that 95% plus contracted portfolio into the hands of credible experienced counterparties as well as our own. So expect things to be very challenging for a number of participants. And as we sometimes call them LNG tourists being among them.

That's very helpful. And then maybe just a quick follow-up to one of Spiro's questions here on the 2026 outlook. Maybe asking it in a different way. Is that range that you gave on total volumes? Does that include like is the high end potentially baking in an acceleration of Trains 5 through 7 or would an acceleration of Trains 5 through 7 similar to like a Train 4 time line sort of a setup, push you above the range?

Time will tell, but put it this way. Just on Trains 4 through 7 coming online, if they were each one month early or one month late, that's like 0.5 million tonnes alone. So that alone is a 1 million-tonne swing. And then if you just think about year-to-year operational reliability, variability, ambient temperatures, that's easy, 1 million tonnes at this point because just to remind folks, we're now in over 50 million-tonne operating company. So yes, there's a little bit in there. But if there's even more acceleration than that, or it's a bit colder or the operational liability is higher year-over-year, we could be at the high end or something else. So we'll see. But that's not really our style. We'll stick to 51 to 53 for now.

We'll take our next question from Jean Ann Salisbury, with Bank of America.

Well, the debottlenecking for CCL3 occur kind of gradually from now until 2028 or would you expect most of it to occur concurrently when Trains 8 and 9 start up?

Jean, this is Jack. The debottlenecking started the day we took commercial operations of Train 1 and has been ongoing. And the team has done a great job with maximizing the production of those first 3 soon to be 4 trains very, very quickly, and I would expect us to continue to refine that as we go.

I would say that to get to the high, high end, we acknowledge that even Trains 8 and 9 at mid-scale would have some debottlenecking equipments. So that will come over time. But based on how things are working and some of the work that we continue to do, as Jack mentioned, yes, we're hopeful we can start doing better than 1.5 in the near future.

Great. And then as has been referenced a lot on this call, there's been so much contracting year-to-date, so many projects going forward. So I guess my question for Anatol is in terms of global project FIDs, do you think we're near the end of this wave or in the middle?

Yes, a lot of FID, not as much contracting, I would say. But yes, so the world overall has had a very robust year. You remember the discussions of 4, 5 years ago is long-term contracting going away, and our view was always that it's not, but it is cyclical. So this year, I believe, over 80% of the contracts executed have been 20 years or longer, and there's still some more to be done globally but with the world at 70 million tonnes U.S. is about 61 million tonnes year-to-date, I think this period is in its denouement, shall we say.

We'll Take our last question from Manav Gupta with UBS.

We actually went through your revised Sabine Pass filings in June. And just like if you look at the earlier February filing of 2024, you seem to have found a number of extra MTPAs in a very short period of time. And I'm just trying to understand how are your engineering teams able to accomplish this so quickly? And if you could help us understand how this additional capacity was realized or could be realized as you bring this project on?

Sure. I think credit to our engineers and our operating folks that are always finding ways to debottleneck the facilities and get more out of them. I believe what you're speaking to is the FERC filing for the Sabine expansion. And clearly, as I mentioned before, as we intend to permit as much as possible at the 2 sites we're going to explore with Bechtel every which way to get the most out of Sabine Pass to ideally get that cost per tonne as low as possible by obviously working on the cost side, but specifically on the MTPA side as well. So I think there's just more ingenuity and pushing for the art of the possible right now for the permitting process, and then we'll see what we actually FID as none of that matters if it doesn't meet the standard.

This concludes our question-and-answer session. I'd like to turn the conference back over for closing remarks.

This is Jack. I just want to say thank you for all of your support and for your questions and always keeping us on our toes.

This concludes today's call. Thank you for your participation. You may now disconnect, and have a great day.