Cheniere Energy, Inc. (AMEX:LNG) Q4 2022 Earnings Call Transcript

Jeremy Tonet: Got it. That’s very helpful. Thank you. And just want to kind of touch on some of the other points you listed on that slide as far as it relates to the Boil-Off Gas Re-Liquefaction Unit and accommodation for waste heat removal and CCS. Just wondering if you could talk a bit more about these projects. What type of economics to these CapEx, do these projects have? Does it compete versus the facilities themselves? And did things such as 45-Q, I guess, possibly help economics here?

Jack Fusco : Yes. Jeremy. So on the Boil-Off Gas, right now, the Boil-Off Gas is the facility gets redirected back into the trains and gets reprocessed, and that takes up space in the train. So our production numbers look the same, but our feed gas flows aren’t as high as they otherwise would be. And we have run the math and figured that the Boil-Off Gas Re-Liquefaction Unit would substantially help us increase the production throughout the rest of the facility. So that’s an added benefit that we don’t currently have at either of the sites. And then secondly, you mentioned some of the heat recovery units. As you know, I’ve been in power my whole life, and I think being able to capture the hot flue gas out of the end of the gas turbines, run them, produce steam, use that to make power, just makes the whole process more efficient, makes us much more competitive overall.

So we need to utilize that waste heat, and it helps with our environmental profile. So you should expect us to do what’s right, and that would be utilizing that waste heat and reinjecting or sequestering the AGRU stream that comes off the gas stream efficiently.

Jeremy Tonet: Got it. That’s great to hear about further optimization and squeezing every penny out. Zack, thank you.

Operator: We will take our next question from the line of Marc Solecitto with Barclays.

Marc Solecitto: Hi, thanks. Good morning. With the formal upgrade to IG, could you talk about some of the benefits that come with that either commercially and or on the operational side with respect to either working capital management or collateral requirements related to hedges or forward sales?

Jack Fusco : Sure. So getting to IG is more than just symbolic. We actually have lower pricing now on our working capital facilities and revolvers. And both the corporate revolvers are now officially unsecured, which gives us even more flexibility going into the future. So that’s all helpful. In addition to that, all the optimization that CMI does sometimes even sourcing from third parties. We’re not posting nearly as much as we used to with LCS and things like that. We can just use a parent guarantee considering CMI is wholly owned by CEI. So that’s pretty helpful. And then in terms of open credit, we’re getting more that’s a work in progress as we speak. But basically, when it comes to financial derivatives and hedging, that’s still all about liquidity.

Yes, we might have a little open capacity, but as we saw with the volatility this past year, that’s still a liquidity thing. And what I mentioned on the call, we literally have $10 billion of total liquidity with the term loan that’s available, the revolvers and the cash on hand. So we have legged in a bit on financial hedging. And that’s been helpful partially to why we’re down to only 50 TBtu really open going forward.

Marc Solecitto: Great. That’s helpful. And then following up on a potential expansion at SPL, how should we think about the key potential cadence there? Could you do that one train at a time? And then for the 20 million tons of expanded capacity, is there the potential for some additional debottlenecking on the existing capacity with some of the investment in the ancillary infrastructure?