Zach Davis: Hey Jeremy, I was expecting that question from you. But basically, yes, we have over $3 billion of cash sitting at CEI specifically. And you should assume over time as we fund Corpus and there’s still about $1.2 billion of equity funding to go on stage 3, and obviously, pick up on the buyback, that will trend to $1 billion in a run rate phase once we get really through Stage 3. And in terms of the buyback, you just look at the last 2 quarters and you’re starting to see that the buyback deployment is higher than the debt pay down. Just in Q3, it was $300 million higher, 7x as much. And at this point, buybacks for the year are about to eclipse the amount of debt pay down we did mainly earlier this year to get to IG and for everyone to just be tracking the buyback, it will be lumpy, volatile quarter-to-quarter as we try to be opportunistic.
But what you can track it to is basically, we have already deployed over $3.5 billion to debt pay down in the updated capital allocation plan and just over $1.5 billion of buybacks so far in the same plan. So there’s basically a $2 billion plus catch-up trade that needs to occur really through 2024. So you can imagine we’re pretty focused at CEI on funding the Corpus Stage 3 growth as it accelerates and to catch up on the buybacks with that, yes, at least $2 billion to go in the next year or so. In the meantime, we’ll focus on Sabine growth, getting ready with all this commercialization that we’ve done by likely ramping down the variable DPU next year to start being in a position to fund that project once we can FID that in the next few years.
And in terms of the Stage 3 expansion upon that for Train 8 and 9 we might fund that debt. There’s going to be plenty of equity up there as well with the $20-plus billion of available cash through $26 million.
Jeremy Tonet: Got it. Very helpful. That makes sense. And also looking forward to Corpus coming online early some extra marketing margins there, helping out even more. So thank you for all the color, and we’ll be talking later to see you at the conference.
Operator: We’ll go next to John Mackay with Goldman Sachs.
John Mackay: Thank you for the time. why don’t we pick up on the CQP variable distribution comments there, I figured that would be a fourth quarter call conversation, but thanks for kind of flagging that. Would just be curious on kind of where you think that needs to go at the CQP level? And then kind of more broadly, where do you want to see the kind of CQP-specific balance sheet go to, to be able to fund the SBL expansion if that moves forward?
Zach Davis: Sure. So we’ll provide guidance for EBITDA and DCF for CEI on the Q4 call in February, and we’ll provide guidance on the DPU for CQP at the same time as we work that through with our partners in Brookfield, Blackstone and the Board there. But basically, CEI is going to be focused on the growth and focused on the catch-up on the buyback in the billions. CQP is going to be focused on a robust distribution and really trending their debt-to-EBITDA metrics closer and closer to 4x or under. Basically, CEI is a consolidated entity and why it’s investment grade is because we’re already under 4x on a run rate basis with lower margins than today. CQP slightly above. So how we think about it is, basically, if we can retain some of that cash flow over the next couple of years, get the metrics down a bit lower, we’re going to give ourselves a lot of flexibility financially to really re-up the leverage when we FID the Sabine expansion, keep at the very least, but probably more than the base distribution going and yes, keep the ratings and everything intact while growing that DPU over time to something closer to over $5.
So yes, we’re still pretty comprehensive across the board in terms of debt paydown, buybacks and growth. it’s just going to be mixed between LNG and CQP.
John Mackay: Right. I appreciate that. Maybe just picking up on one thing we haven’t talked about I guess, more recently, just the CCUS potential for some of the expansions. Would just be curious to hear how much you’re getting asked by your customer base to kind of include that? I know you’ve been able to sign a couple of different types of customers without necessarily moving forward on that. But would be curious kind of where broader sentiment sits there.
Jack Fusco: Yes. Thanks, John. I’ll talk about the CCUS capabilities or what we’ve been doing at Sabine and Corpus. We’ve spent an enormous amount of time on engineering looking at ways to capture whatever carbon or greenhouse gases we can. We think the IRA bill going from $50 to $85 was a step in the right direction and we continue to look for opportunities to make our operations cleaner and more sustainable, which is a real focal point of myself and the team, and our customers, as you know, quite a few of them are from Western Europe and they’re asking us as many questions as you are, and I’ll turn it over to Anatol.
Anatol Feygin: Yes. Thanks, Jack. Thanks for the question, John. The customers that engage with us on this front, and obviously, it’s a growing percentage. Jack mentioned some of the key European partners that are probably more advanced stages of developing these strategies is it a comprehensive approach, and we partner with them across a number of dimensions. Nothing is prescriptive, but one of the reasons we have these engagements and have the opportunity to proceed is because of all of the things that we are doing to improve our life cycle emissions profile. CCS is part of it as well as all of our programs with producers pipeline shipping companies that measure and ultimately report our emissions. We have the only program to date that issues cargo emissions with every cargo that we’ve had in place for a little over a year. All those are critical components to these engagements now that it is so prescriptive as to say we will work on X and we will deliver why.
Jack Fusco: And if you haven’t already seen it, it’s posted on our website, our CR report went live about 2 months ago.
Operator: We’ll go next to Jean Sadsbury with Bernstein.
