Good morning. My name is Dennis, and I will be your conference operator today. At this time, I would like to welcome everyone to the Methanex Corporation 2023 Fourth Quarter Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. I would now like to turn the conference call over to the Director of Investor Relations at Methanex, Ms. Sarah Herriott. Please go ahead, Ms. Herriott.

Thank you. Good morning, everyone. Welcome to our fourth quarter 2023 results conference call. Our 2023 fourth quarter news release, management’s discussion and analysis and financial statements can be accessed from the reports tab of the Investor Relations page on our website at methanex.com. I would like to remind our listeners that our comments and answers to your questions today may contain forward-looking information. This information, by its nature, is subject to risks and uncertainties that may cause the stated outcome to differ materially from the actual outcome. Certain material factors or assumptions were applied in drawing the conclusions for making the forecasts or projections, which are included in the forward-looking information. Please refer to our fourth quarter 2023 MD&A and our 2022 annual report for more information. I would also like to caution our listeners that any projections provided today regarding Methanex’s future financial performance are effective as of today’s date. It is our policy not to comment on or update this guidance between quarters. For clarification, any references to revenue, EBITDA, adjusted EBITDA, cash flow, adjusted income, or adjusted earnings per share, made in today’s remarks reflects our 63.1% economic interest in the Atlas facility, our 50% economic interest in the Egypt facility, and our 60% interest in Waterfront Shipping. In addition, we report our adjusted EBITDA and adjusted net income to exclude the mark-to-market impact on share-based compensation and the impact of certain items associated with specific identified events. These items are non-GAAP measures and ratios that do not have any standardized meaning prescribed by GAAP and, therefore, unlikely to be comparable to similar measures presented by other companies. We report these non-GAAP measures in this way, because we believe they’re a better measure of underlying operating performance and we encourage analysts covering the company to report their estimates in this manner. I would now like to turn the call over to Methanex’s President and CEO, Mr. Rich Sumner, for his comments and a question-and-answer period.

Thank you, Sarah, and good morning, everyone. We appreciate you joining us today as we discuss our fourth quarter and full year 2023 results. I’m excited to report that the G3 plant is in the process of starting up, and we expect that commercial production is imminent. G3 significantly increases our cash flow generation capability and has one of the lowest emission intensity profiles in the industry. We’re extremely proud of our global team for safely delivering this high-quality addition to our asset portfolio. Turning to our results for the fourth quarter. Our average realized price of $322 per tonne and produced sales of approximately 1.7 million tonnes, generated adjusted EBITDA of $148 million and adjusted net income of $0.52 per share. Adjusted EBITDA was higher compared to the third quarter due to the higher average realized price and higher produced sales. Our global team has delivered a strong year of operating results with production of 6.6 million equity tonnes. For the full year 2023, we recorded adjusted EBITDA of $622 million and adjusted net income of $153 million or $2.25 per share. We estimate that global methanol demand increased in 2023 to approximately 91 million tonnes. Through the fourth quarter, market conditions strengthened with increased demand primarily in China outpacing and increasing supply, leading to a drawdown on inventories and increasing methanol prices. Global methanol demand grew by over 3% compared to the third quarter with significantly improved operating rates in methanol-to-olefins and growth in traditional demand in China. Outside of China, demand for traditional and energy applications remained relatively stable. We estimate MTO operating rates have increased from low-70%s in Q3 to mid-80%s in Q4, driven by the completion of planned downstream expansions and an improvement in affordability during the quarter. On the supply side, production increased from…

[Operator Instructions] And your first question comes from the line of Joel Jackson with BMO Capital. Please go ahead.

Hi, good morning. When we think about the buyback now, you talked about what your capital allocation priorities are to get through the last, I don’t know, $80 million or $90 million of spending in G3, put enough cash in the balance sheet to pay back the bond later the year? When do you think you’re going to be in a position to you have enough cash buffer on your balance sheet and you’re ready to start buying back stock?

Yeah, I think, Joel, we’re obviously monitoring the market’s methanol pricing, certainly where it is today. Methanol pricing is – we generate strong cash flows at today’s methanol price. So, it will be a function of our outlook on, firstly, is building up the cash for, or at least having an outlook on the market by the time we make that decision to maybe open up a bid. But I wouldn’t say we’re there yet. We’re going to monitor the markets. We’d like to get G3 up and running and focus on getting that up to full rates. And, I think, if you look forward, you hold pricing where it’s at today through Q2 with all of our assets running, we’ll be building cash. And if we can get confidence that the market’s holding in, then we’ll see – maybe we don’t have to wait until everything’s built before we open up that flexibility. But we’re not there yet, but we’re going to pay attention really, really closely to how things build up over the next few quarters here.

Okay. That’s helpful. So, when G1 and G2 came on across 2015 and early 2016, there’s another plant also in the U.S. that came on. I know there’s a lot of pressure on methanol inventories in the States. I think prices went quite low. They bounced back across 2016. You’re about to put a bunch of new methanol volume on the market coming out of the States. U.S. is about to go long methanol to greater amount now. What is the team doing to make sure that you’re balancing the market? We’re going to run full rates in a month. How do you make sure [you don’t – hurt] [ph] the market?

So, I mean, Joel, where we’ve been on from a sales perspective, we’ve really built up sales in advance of G3. So, when we start up the plant, what it’ll be is it’ll be a displacement of purchased product. And like I said, we’re already – we’re anticipating and building everything into our plants that we’re getting up to full rates by the end of February. We planned our supply chain about 2 to 3 months out. So we’ve already pulled back on purchases and market pricing has stayed stable, if not increasing. So, I would say a lot of G3 is in the market today without the plant operating. And part of this is the fact that the timing at which we’re doing this is fortunate, because the market is typically structurally short in this timeframe. But I would say a big portion of G3 is already in the market, because of our supply chain decision making that’s already there.

Your next question comes from the line of Steve Hansen with Raymond James. Your line is open.

Yeah, thanks, guys. Rich, as you think about the gas opportunity in Argentina to bring on sort of those two plans at full rates, full time. What is the timeframe for those discussions with the Argentine gas suppliers and the time to contract all different things you need to do in advance to get the secure supply so that you can run those basically at full rates?

Thanks, Steve. I think when we look at Argentina, it’s a real positive story for us right now. And, I think, you have to go back to where is development, what’s the pace of development in that country, really good progress through 2023 with the tie-ins that they made to the Vaca Muerta. And, just how they’re phasing that in, the first tie-in happened where it added about 11 million cubic meters a day of gas into the grid. The compression they’re going to add to that pipeline is going to double that capacity that’s supposed to happen in the first half of this year. And then there’s a twinning of that pipeline that’s going to double all of that. So that’s about a third of the gas supply demand in Argentina. That twinning is supposed to happen through 2025. In addition to that, there’s a project that’s happening in the southern basin, which is Total and Wintershall and others. It’s the Fénix [ph] project that’s in the south as well. And that gas is meant to come online at the end of 2024 into 2025. So, I see it’s already positive. We’re already seeing more gas availability in the non-winter months, and that’s allowed us to operate both plants. What I see is there’s going to be a lot more positive developments in the next few years. And what I would say is our goal is to contract on a longer-term basis, this full gas in the non-winter periods. And then, over time, we shorten those shoulder periods to the point where we can move towards full gas supply. So I can’t give you exact timeframes, but I think there’s going to be a lot of positive things happening in the next few years, and certainly we’re going to be working very closely with our gas suppliers.

Okay. That’s great. And then just on your reference to discussions with some of the ship owners around methanol supply arrangements, is there something you need to do to sort of carve out any stream of methanol, whether it’s RNG based or some sort of low-carbon based fuel stream, to provide that kind of fuel type for the methanol operators? Or are they just looking for the regular methanol as a starting point?

I would say there’s a combination of discussions going on. There’s regulations in Europe that are really driving the desire for low-carbon or green methanol. And so, when our discussions with a lot of those shipping companies do focus more into investments in renewable, whether that be [RNG or e-methanol; bio-methanol or e-methanol] [ph]. And so those discussions are ongoing. There’s also discussions about conventional methanol happening as well outside of Europe and with other shipping companies. But like I said, there’s a number of different factors, I think that the marine industry is working with, and that will influence their ultimate choice in fuels. And, certainly, our low-carbon solutions team is working right along with them on how we can provide solutions, be it investments in green or conventional methanol or both. So, I think, we’re going to have more to report here as we move through this transition to have these ships on the water and it’s going to evolve. So hard to give you exact timeframes and volumes as it relates to methanol. Certainly, these are dual-fueled ships and there’s options for traditional bunker fuels. We think that methanol looks is competitive to the alternative low-carbon solutions in the diesel space, but again that’s also going to evolve.

Your next question is from the line of Hassan Ahmed with Alembic Global. Your line is open.

Good morning, Rich. You guys saw a good bump up in pricing over the last couple of months particularly in Europe. So my question kind of is around the variances or divergences in pricing. There still seems to be a fairly large delta between, call it, U.S./European pricing and Asian pricing. So would love to hear your views around that delta.

Thanks, Hassan. I think when we look at the markets, we tend to start with China. China becomes – is the cost setter in the market. And today, we say cost curve is around $280 to $300. And we see MTO affordability, which is a big buyer to the industry kind of in the same range. And so, we’ve seen that price holding, I would call it, relatively firm for quite some time. And then what we see is that depending on, I call it, the tightness in the market. We see pricing in other regions at a premium to China, which varies depending on supply and demand into those markets and availability of methanol. So if you have unplanned outages in the U.S., then the premium in the U.S. market will go up for a period. But what we’re seeing is things kind of settling in at around – on average, we’re in this $30 to $50 over China. And like I said, for the first quarter here, we’re at $335 to $345 per tonne on an average realized basis with China in that $280 to $300. So we’re very happy with the pricing that is happening in the market, which is reflective of tight market conditions.

Fair enough. Fair enough. And just moving on to the natural gas side of things, particularly in the U.S. I mean, I know between sort of last year and this year, we’ve obviously seen natural gas prices in the U.S. coming down a fair bit. Can you talk a bit about the differences in your hedging strategy between 2023 and 2024? Because I know you guys had obviously hedged out a fair amount of U.S. natural gas last year. Where does that stand this year?

Yeah, we are – so our strategy is kind of to have 3 to 5 year rolling hedges and we actually go beyond that, but at much lower quantities. And we target in the near-term years to have about 70% of our position in North America hedge. And that’s where we’re at today with G3 operating at full rates. So, effectively, you could say we’re participating, it will be participating in the spot market at around 30%. We set that level based on the minimum operating rates in our plant and we target a delivered cash cost that we’re comfortable with to operate at all points in the methanol price cycle. And so, we’ve been successful in putting in those hedges. We’re happy with where we are. We’re not seeking, in the short-term, to be hedging up beyond that level. And we continue to be active in the market layering hedges in the outer years as the new year’s roll in. So hopefully that helps you with that question.

Your next question is from the line of Ben Isaacson with Scotiabank. Your line is open.

Thank you very much, and good morning. First question is on New Zealand. Just looking back at my model, I see, in 2016 you produced or sold 2.2 million tonnes from that region, and now 8 years later were down about 50% to 1 to 1.1. What should we be modeling as a run rate for New Zealand going forward? Not in 2024 but beyond 2024. What’s the realistic game plan there and is there an opportunity to monetize an asset that’s not being used right now?

So thanks, Ben. For modeling purposes we’re giving guidance right now at 1-year out and a lot of this is based off of developments that are happening in the natural gas fields and the Taranaki Basin as well as other factors. I think what we’ve seen, when you look at the decline over that time period that you referenced, it’s all about what’s happening in the different fields in New Zealand. We did see that there was a revision in reserve estimates in one of the major fields that brought, that was quite some time ago that brought production down. Today, I wouldn’t – we don’t forecast to have Waitara Valley, the smaller plant in our plants. We’re really focused on the two Motunui plants and getting gas for those plants. I think when you look longer-term, how do you think longer-term for these assets is, you have to look at both above-ground and below-ground factors. And what I mean by that, above-ground, we play a huge role in New Zealand and the natural gas market. The country uses most of the power is renewable power, but natural gas is an important power source when there’s intermittent gas – intermittent power supply. And it’s a low-emission power source, otherwise you’re dependent on imported coal. We represent 50% of the market and we’re the base load customer for the natural gas industry. So I think that is an important factor. And the second one is the government. There’s just been a new government put in place in New Zealand, the center-right coalition. Their platform is much more favorable towards the gas industry in comparison to what we’ve seen for the last 6 years. And that is a clear direction that they’ve set coming into power. So that’s positive. And then, obviously, looking at below-ground, some of the campaigns that have been run for the last year or so, they haven’t delivered the results, which is what you kind of expect, sometimes you’re going to have results, sometimes you won’t. These have not delivered results in the wells that have been producing, we’ve seen declines happening a little quicker. So we’re working with our gas suppliers really closely on the investments they’re going to be making to improve the existing wells and also the impact that has on their future campaign. So it’s difficult to give you, what is that going to result in for a long-term run rate? What I can say is our focus is on the two Motunui plants and keeping those trying to improve the production from those assets.

That’s super helpful. And then just one more, if I may, forgive my bad math here. But you said that the world grew at an annualized rate of 3% in Q4 and ex-China, the world was stable or maybe about roughly flat. So given that China’s roughly half of global demand, does that mean that China really grew at 5%, 6% in Q4? And if you take MTO out, what did non-MTO China do? I think that’s what investors are quite interested in, because MTO will fluctuate all the time, but we really want to see demand improvements from underlying China. Thank you.

Ben, yeah, so we did see some demand improvement in traditional applications in China, as well as MTO, and overall growth rates were about 6% in China quarter-over-quarter. Traditional applications, obviously, it is something that we’re watching really closely as well. For the year in China, we saw about 5% to 10% growth rates in China across all applications. So that was MTO, other energy applications and traditional chemical applications; and traditional chemical applications were supported in industrial production in China increased by over 5% for the year. Export demand was weak, but they were exporting a meaningful amount especially in comparison to the previous year where they were in a COVID year. So in a way what we did, we were coming off of a lower base coming into 2023, but 5% to 10% growth rates across all those different applications when it represents 60 to 65% of your demand obviously is going to be meaningful for the industry.

Your next question is from the line of Josh Spector with UBS. Your line is open.

Yeah. Hi. Thanks for taking my questions. First, I just wanted to ask just within Europe and thinking about Red Sea and Middle East disruptions. Has that had any impact on the region? I know for some other commodities talking about potentially limiting supply into Europe being an upward price perhaps catalyst. I know methanol floats tend to be in the other direction, but what are you seeing and what do you think plays out here near-term there?

That’s exactly right. It hasn’t been a big impact for us nor for the methanol industry broadly. Our supply chain we don’t have any product flowing through the Suez and the Red Sea. We would if we were supplying Egypt to Asia, but Egypt is really an asset that supplies mostly our Mediterranean customers. So we’re not impacting then as a broad industry, the flows from the Middle East have really pulled back over time and are almost negligible and that’s on the basis that there’s been a lot of new Atlantic production that’s come online over the past many years, and so it hasn’t impacted the methanol pricing are really tightened up the market in Europe. I would say what we’re continuing to monitor, which everyone will be monitoring is potential escalation in the region and the Strait of Hormuz is, where probably 15% to 20% of supply, because all Middle East supply flows through that region. And just given recent events with Iran, something we’re watching very closely, but that would impact many, many different commodities. And so, we’ll continue to monitor that. But so far, the impact’s been pretty muted.

Thanks. I appreciate that. And just a quick one on CapEx, if I could, just as G3 winds down, I mean, you go more to maintenance levels, but you’re talking about a little bit of growth when you think about marine fuel and some other applications. What’s the range of CapEx you see over the next couple of years that will go forward?

When we look out, we don’t see any real meaningful capital in the next few years when it comes to either intrinsic organic growth opportunities or low-carbon methanol investments. It will take time to develop. We’re developing these opportunities, but that will take time. So we’re not standing still. We’re developing these. But in terms of capital spend, we don’t see a lot of outflows or outlays being needed in the next few years. So really when we look at free cash flow generation, the focus again is the balance sheet and then excess cash to shareholders, which we’ve been pretty consistent with over the years.

Your next question is from the line of Nelson Ng with RBC Capital Markets. Your line is open.

Great. Thanks and good morning. My first question is, in terms of the outage in Egypt, obviously, you still need to supply Europe. Did you see materially higher transportation costs in Q4 and maybe in Q1? And if so, should we assume that things kind of normalize in Q2?

Yeah. Thanks, Nelson. Yes, we did see higher logistics costs. And I would say part of that was because of Egypt. Additionally, it does depend on your supply chain movements with more Chile product in our asset base, we do see more flows from Chile to Asia. So a little lengthening of the supply chain there. And we move forward, our supply chain, it will be partially lengthened with G3. G3 product will be flowing to all different areas within our supply chain. But there will be likely more flows into Asia as well. So, hard to say, how you model all that. But we expect there could be some slight increases in our ocean freight just based on shipping days and lengthen in the shipping and the supply chain.

Okay. That’s good to know. And then just one follow-up on New Zealand, you mentioned the lower supply. Is that from a maintenance outage at wells versus generally lower output? Would you say that the generally lower trend of output is that the larger factor in terms of your forecast for the large decrease in methanol production in New Zealand? Or is it specifically like a very big outage or long outage you’re expecting for maintenance at the wells?

It’s about half and half, I would say for that, like it’s about half because of the outage and half because of lower gas profile.

Okay. Are those outages like every other year or once every several years? Like should we expect these outages to happen again in 2026?

Every few years. Yeah, every 2 – around every 2 or 3 years.

Okay. So, base cases, we might see a modest increase in 2025 out of New Zealand if everything else remains unchanged.

We’ll keep updating you on the progress and we’re going to work really closely alongside and be able to give you better view on that as we get closer to next year.

Your next question is from the line of Matthew Blair with the TPH. Your line is open.

Hey, good morning. Thanks for taking my questions. I had a couple of modeling questions for G3. First, are there any significant startup costs that we need to incorporate into Q1? And then second, this inventory build in Q1, is that going to be like just a permanent part of your working capital or will it be temporary? And if it’s temporary, is that something that you think will reverse by the end of 2024 or something further out?

Thanks for that. So, the first question is about capital. There will be no other kind of startup costs for us to be focused on. Everything in terms of starting up and commissioning the plant is included in our $1.25 billion to $1.3 billion. And that’s all included in the numbers, the $60 million to $110 million, including what’s in accounts payable today. So, you shouldn’t foresee anything beyond that. As it relates to inventories, what I think we’ll see this year is, overall inventory levels will likely stay something similar, potentially even down like we could see inventories be managed down. We’re not significantly increasing our sales. So there isn’t a need to increase overall inventory levels. And I would expect to see that these things moderate over time in terms of the produced inventory buildup that you’re seeing today. So I wouldn’t be forecasting this to be a permanent. And what we will see is that overall inventories stay the same, but there’s sort of a flip between produced inventories and purchased inventories, as we’ll be buying a lot less proportion of a purchased and producing more.

Okay. And then, so does that mean for 2024 that your sales volumes should be pretty close, maybe a little bit less than the 8.1 of production?

Yeah, it should be pretty close. And it might be slightly lower, because of the inventory build.

Got it. And then my follow-up is just around RNG. Could you talk about what percent of your sales were based on a RNG feedstock in 2023 and how might that change in 2024 and beyond? And what kind of customers are interested in methanol from RNG? Is that mostly the shipping or anything changing on the customer front there? Thanks.

Yeah, so I think the first and foremost, the overall level is quite small. Today, we have one customer purchasing bio-methanol, but there’s lots of interest. So there’s lots of interest in low-carbon methanol and RNG-based methanol. I think the challenge is about cost and availability of RNG. And RNG has other competitive alternatives that have increased the cost quite significantly and the premiums you need to pay. And so, we are trying to work on arrangements where we can maybe get a more favorable price by locking in longer-term and then selling into those markets. And those are the things that we continue to pursue. And it’s not just RNG in North America. We’re looking at renewable natural gas in all of our jurisdictions to find out where we can source it economically and securely over time. In terms of the customers, it’s shipping. The shipping customers are interested in RNG, but also traditional chemical applications are also interested. In fact, the one contract we have is into the – is a traditional chemical application. And what it’s really customers that are seeking to have a green or bio kind of attached to their end product. So we’re seeing that in certain segments. It’s consumer markets, that is where we’re seeing it, ultimately landing in consumer markets that would be able to demonstrate a feedstock that’s more lower carbon or green. So we’re continuing to develop it, lots of interest, obviously getting securing long-term affordable renewable natural gas is the key. And then working with customers on their willingness to pay.

[Operator Instructions] Your next question is from the line of Laurence Alexander with Jefferies. Your line is open.

Good morning. Could you give a bit more detail on what you’re seeing in China in DME demand and the industrial boiler applications? The amount of pull through?

I mean, yeah, I’ll speak to China a little bit deeper here. Maybe across all the applications, in particular, the ones you’re focused on. So in other energy applications, we saw growth rates, again, 5% to 10%. That includes MTB, DME, other thermal applications, boilers, and kilns, as well as other fuel applications, such as cooking fuels. And so, we saw a lot of very strong growth rates across all of those applications. In terms of boilers and kilns, where we see boilers at today is that these are residential and industrial applications. But I would say that, originally, there was thought that it would replace big, big industrial boilers. We haven’t seen that. Where we see it is in smaller applications, commercial, and smaller industrial changeover. So it’s a decent growth rate, but it’s not some of the projections that were made early, I think, in this space where we’re quite dramatic. But we are probably seeing 5% to 10% would have seen that this year in that segment. Your question about DME? DME has been relatively flat, right, because that industry has kind of operated at a certain rate. It isn’t growing or expanding. And the existing industry sort of operates that are around kind of at 80% rate. And so, we don’t see DME growing at all. It’s really the other applications like cooking fuels, boilers and kilns, M100 vehicles. And Geely has a fleet of vehicles, but they’re also developing heavy duty trucks. And so that’s where we see more of the momentum is less so in, I would call it, the older new application DME and more into these newer applications.

And if I may just one follow-up on that and then one structural question. With respect to the kind of the frontier [ph] expectations, I remember when the first industrial boiler discussions happened, a lot of it was about kind of the need for clear policy at the federal level to sort of force or trigger kind of the adoption at the larger sites. Did that policy ever gel or is the absence of that sort of why you’re seeing sort of the shift in demand to mostly being these small applications?

What happened there was that industrial sites, large industrial sites, got connected to the gas grid, right? So they needed to reduce down their power by coal and we saw a lot of those, as much as possible, those industrial sites got more connected to gas and we’re using that as an alternative versus methanol. And so methanol is actually being developed more in spaces, where connecting to gas is unavailable and it tends to be in smaller industry or residential commercial applications. So policy didn’t change.

Your next question is from the line of Steve Hansen with Raymond James. This is a follow-up. Your line is open.

Oh, yeah, thanks for that. Just a quick follow-up. I wanted to circle back on the supply picture, Rich. I think you referenced the Malaysian facility coming on, G3, of course. But I don’t think you referenced anything out of Iran this year. Just wondering if you’ve got sort of a view specifically on those facilities that have been sort of used about for some time and whether they’re going to be contributing it all to an incremental supply this year. Thanks.

Thanks, Steve. Yeah, so for Iran, it’s obviously getting information out of Iran and understanding what’s going on there is often opaque. So we rely mainly on what we hear in the market as well as what we see on trade close. The news in the market that potentially the Iran [ph] plant started production sometime this year. We have seen some supply in the winter greater than what we’ve seen previous years, but we think that’s more based on weather. It’s been a warmer weather than a lot of new supply coming out of new assets. It’s something we continue to watch. When we think about Iran, we think the structural constraints are going to be the same, which is under sanctions environment you have, it’s difficult to operate these plants. A lot of them have been built with local EPC resources, difficult to run from a technical perspective, and the gas grid is constrained for a big part of the year. So, I think, we will watch to see what happens when the winter ends, and we see potentially more gas availability, and it will tell us whether we see any new incremental supply coming from new plants. But we think those structural constraints are there and they’re going to continue. So, we don’t factor in a big amount of net supply coming out of Iran, irregardless of whether plants startup.

That’s helpful. And just the obvious follow-on question is, I know G3 is just turning on, so it’s probably a bit premature, but when do you start scoping the next facility? Presumably, that’s probably already happening. But when does the actual thought of hard dollars going into the ground start to enter the equation? Are we talking 3 years out, 5 years out? How do you think about that longer-term? Thanks.

So, the phases for us we’ll be looking at doing commercial work to really explore our options, and it’ll be partly commercial, partly technical, looking at our different options that are available. That’s where we are today. That process will then be narrowed down into which are the ones you want to progress. Then, we would talk about a pre-feed, which would be really still fairly limited capital. And then the next step is to move into a feed, which you start spending more money, but still, I don’t think is the capital you’re talking about. You don’t get there until you reach a final investment decision. So we’re always away from a final investment decision where you start turning it to spend meaningful capital on a new project.

Your next question is a follow-up from the line of Josh Spector with UBS. Your line is open.

Yeah, thanks. Just a quick one to clarify. When you were talking about the kind of guide or the walk to first quarter, you said slightly higher sequentially. I guess pricing up is up a decent amount. Understanding G3 is probably not in the math until second quarter, but Egypt was down last quarter. I guess what’s offsetting that when you’re expecting Egypt to start. Is it a big cost of the repair or maintenance associated with it or something else which limits your first quarter increase?

Yeah. I think it’s really we’re going to be building inventory through the first quarter rather than seeing that product flowing through sales. So I think really when we look at our inventory as we bring G3 and Egypt up, our overall produced sales for Q1 are looking really similar to Q4. And really it’s about price. So I think when we look at quarter-over-quarter, it’s more of a price story than seeing that incremental. And then when we get to Q2 is where you start to see kind of what we would call the run rate production coming through the actual sales. And that’s why we kind of point to Q2 as being more indicative of our run rate and cash flow capability with all our assets running.

Okay. Thank you.

There are no further questions at this time. I will now turn the call back over to Rich Sumner.

All right. Well, thank you for your questions and interest in our company. We hope you’ll join us in April, when we update you on our first quarter results.

This concludes today’s conference call. Thank you for joining. You may now disconnect.