Theresa Chen: Thank you.
Operator: Thank you. We’ll go next to Spiro Dounis with Citi.
Spiro Dounis: Thanks, Operator. Good morning, team. I want to go back to the 2020 Vision, if we could, Zach. It’s for about one and a half years into that program, and you mentioned tracking on or even had a plan to-date. But I guess if we just shift the focus to the forward outlook and think about that outlook for 2025, oh, sorry, 2024 through 2026, how does that compare to what you envisioned back in 2022? You sort of set that $20 billion target. I imagine some puts and takes since then, Stage 3 maybe coming on early, not sure where you had the LNG curve then, just trying to understand how much conservatism you imputed there.
Zach Davis: Sure. So I would just say we’re still at $20-plus-billion of available cash through 2026, and there are some puts and takes. We’ve made some more money in years like the past year. This year was always planned to be highly contracted. And then we assumed guaranteed completion dates for Stage 3, meaning not even — Train 7 wasn’t even going to come online until 2027, outside of that period of time. So all in, we’re still over $20 billion. We’ve deployed over $8 billion. So about 40% in about 30% of the time. But the main thing to focus on is really that excess cash and how we’re going to deploy that going forward. And as you can tell, with some of the debt pay down, which will be less than we even did this year, staying inside of CQP, CEI is going to mainly be focused on catching up on the buyback and completing the equity funding of Stage 3.
At this point, we’ve done over $2 billion of buybacks, but we’ve done over $3.5 billion of debt pay down. So there’s still a $1.5 billion, give or take, that still needs to occur for that catch up of the one-to-one. So we’ll be pretty focused on that this year. Case in point, the program was set up to be opportunistic at times like this and that’s why the shares outstanding is trickling down. And by the end of the year or early next year, yeah, we’ll probably have to upsize the plan again and keep on marching on this long-term path to eventually 200 million shares in the long-term run rate.
Spiro Dounis: Got it. That’s helpful, Zach. Thank you. Second question, just given your, I think, one of the largest buyers of natural gas, just curious how you’re thinking about the supply over the next few years. I think right now, producers understandably retrenching, just given where pricing is. At the same time, we’re hearing from some midstream companies that there are pockets of shortages in the Mid-Atlantic just due to the rise in data centers and other types of electric needs. So curious as you think about that outlook when all this energy capacity comes online in the next few years, do you think the producers are going to be able to stand up and sort of deliver on all that supply?
Anatol Feygin: Thanks, Spiro. This is Anatol. I’ll jump in. Look, we’re very comfortable with and confident in the resource and the economics of developing that resource in this nation. The challenge we have, which we’ve highlighted multiple times for years, is building infrastructure. And I think it’s going to be a long time before anybody attempts another Mountain Valley Pipeline or equivalent out of what is an incredible resource in the Northeast, in the Marcellus and Utica. That said, you know us and we take very seriously and as a sacrosanct gas supply and the infrastructure needed to supply our facilities for decades to come and that’s one of many reasons why the U.S. Gulf Coast is our home and we’re very confident that Louisiana, Texas, Mid-Continent can continue to develop the resource and the infrastructure necessary to get it to us.
Jack mentioned the ADCC pipeline that’s moving well, obviously. Permian continues to grow and we’ll need more intrastate infrastructure. We will need more interstate infrastructure as you probably saw we filed for together with our SPL application. So we’re confident that the Gulf Coast will continue to be well supplied, but obviously, would prefer that other resource in the country was able to get to market as well.
Spiro Dounis: Got it. Helpful color as always. I’ll leave it there. Thanks, guys.
Operator: Thank you. We’ll go next to Tristan Richardson with Scotiabank.
Tristan Richardson: Hey, guys. Just one for me this morning. Follow up on a prior question about distribution levels of CQP. I mean, I think, that the philosophy of a base plus variable is relatively new going back to 2022. But is there a potential here that you could rethink that philosophy with the focus on retaining more cash in anticipation of the proposed SPL ex?
Zach Davis: I think what we planned in 2022 was planned for distributing out a lot of cash efficiently in 2022 and 2023, and then being in a position where we can do a mega project inside an MLP. So when we set the $3.10 distribution as the base, we intend to uphold that. Obviously, this year, we’re actually even above that. We had enough cash to be able to meet our objectives going into developing and preparing for the Sabine expansion. And so we’re going to distribute that out to CEI and our unit holders. But when it comes down to FID-ing the project in the next couple of years, the goal is to maintain the base distribution, stay investment-grade everywhere and fund the project within cash flow. So this all kind of works, which is pretty amazing for an MLP, but one with six trains fully up and running, it works quite well.
And then as you think about the $3.10 base distribution or the $3.25 this year, yeah, again, we’re still talking about $2 billion of distribution and an over 6% yield. So we were cognizant of making sure that that was competitive and kept us going in the right direction with our unit holders and our own stake in CQP.
Tristan Richardson: I appreciate it, Zach. And then maybe just to follow up on the 2024 guide, I think in the prepared comments, you highlighted a higher proportion of bridging volumes as one of sort of the upward items in the guide versus the 9-train runway. Can you talk about how maybe mechanically bridging volumes work and how that can kind of contribute more to that upside?
Zach Davis: Sure. Those bridging volumes are basically long-term contracts that helped us underpin or FID Stage 3 that have already begun before Stage 3 has begun. So those bridging volumes are in our 200 to 250 range and why we went into this year 97%, 98% contracted. So when we think about the bridging volumes, though, in the context of having some near-term volumes on a 15-year to 20-year deal, if the curve is liquid, we will get value for the curve and blend it over the 20 years or the 15 years. So those margins are incrementally up to a deal that might start with a CP of a train up and running, but we’re only talking about nickels and dimes here.
Tristan Richardson: No. That’s great. Thank you. Appreciate it, Zach.
Operator: Thank you. We’ll take our final question from Ben Nolan with Stifel.
Ben Nolan: Yeah. Thanks. Hey, guys. Well, for my first one, as we think about how the year plays out and appreciating that virtually everything is fixed, is there going to be any sort of cadence to how the EBITDA and the cash flow comes through or should it be pretty linear, do you think?
Zach Davis: It’s never perfectly linear. We produce more in the winter months at the sites. So with that, you should expect slightly more EBITDA in the colder quarters versus the summer or the shorter seasons. But basically, it should be a year of $5.5 billion to $6 billion to EBITDA and why we don’t guide on a quarterly basis. But we expect 45 million tons and we are now 99% contracted and the optimization, I’m not forecasting that today. So that’s probably the only thing that could create some variability quarter-to-quarter.
Ben Nolan: Okay. I appreciate that. And then for my follow-up, just on the regulatory side, obviously, this is the third time we’ve been going through this process. Curious if you guys think the hurdle is getting increasingly more challenging for new projects or is it — do you think that all of this rhetoric is changing how Washington thinks about the business?
Jack Fusco: No. Well, first, the hurdle has always been high, right? This is a very capital-intensive business. It takes years to get one of these across the finish line. It’s a balancing act between capital costs and SBAs and contracted amounts and financings and everything else. We make it look easy, Ben, but it’s not. The only positive thing in the past was the regulatory certainty around America and contract sanctity. And while I think this is politically motivated, I’m hopeful that at the end of the day, we go back to where we were before, which is we let the market dictate which projects will survive and which ones won’t. And that’s where we’ve always been and the market’s been extremely efficient at who they’re going to bet on and I would bet on Cheniere every single day.
Ben Nolan: All right. Well, and I appreciate you guys putting me in. Thanks.
Jack Fusco: Thank you and thank you all for all of your support.
Operator: That will conclude today’s call. We appreciate your participation.
