Anatol Feygin: Yes. Thanks, Spiro. It’s a period, as we talked about even last quarter, it’s a period of market kind of digesting all of these dynamics and issues, obviously, absolute record year for the U.S. product, with large in ’22, very healthy year in ’23. But clearly, there have been a number of developments that are causing the buyers to reassess and take their time, right? No one has the fog of war and the proverbial gun to their head, like they did in ’22. So I would say the discussions are healthy. They’re advancing, but this is more of a normal year for that side of the equation, then of course, ’22, ’23 work. But we’re very very optimistic, and we think that what will play out for this year and next is going to very much rhyme with prior years in terms of the types of counterparties and the types of engagements.
I don’t think you’ll be surprised by anything that you see from us going forward, but it’s not going to be — it’s unlikely to be a repeat of ’22. The one advantage we have, of course, is again, our performance, our track record, the fact that Corpus Stage 3 is progressing as well as it is and that we maintain our perfect track record of deliveries, and those are all great calling cards as other projects don’t have the same kind of ability to engage based on those factors.
Spiro Dounis: Got it. And second question, maybe just turning to maintenance and turnarounds. Jack, as you mentioned, you’re sort of optimizing it throughout the year and spreading it out. Just curious if there’s any way if you could just quantify how much maintenance is left at this point? And then maybe where some of the heavier periods might be throughout the year.
Jack Fusco: Yes, Spiro. So first, I mean, I’m always pleased that the team has figured out ways to make our maintenance, not noticeable to you all and that we’re able to spread it out and do more maintenance on times when prices or the performance because of the heat during the summer is going to be less and less impactful and less material for us. So while I’m not going to give guidance on exactly how much maintenance is left, I’ll see if Zach wants to add any commentary on what it means financially.
Zach Davis: I think this is pretty similar to what happened last year, where consensus was a little lower than our first quarter results. As folks often divide by for the EBITDA over the course of the year. The major maintenance, the planned maintenance is basically going to be, for the most part, in Q2 and Q3, which is also the time where production is lower as it’s the warmer months. So you should expect a step down in EBITDA to an extent. And that’s why we’re still tracking well in the range and slightly above the midpoint, but that’s why we didn’t move the guidance range even though we had a strong first quarter. So expect that and then maybe in Q4, it comes back up a bit as the weather gets colder and there’s not as much planned maintenance.
Operator: Our next question will come from Ben Nolan with Stifel.
Benjamin Nolan: I appreciate it. One of the things that we’ve been hearing a little bit lately about is increasing EPC costs and also, I guess, this week, labor shortages and just challenges on getting things built. It doesn’t sound like that’s a problem at all for you guys at the moment in Corpus Christi. But — how do you think about things longer term with respect to the signing of long-term agreements and those sort of things. You don’t really know what the cost is going to be at SPL. Just curious if maybe you could validate some of what we’re hearing and how you’re sort of positioned strategically for that.
Jack Fusco: Ben, this is Jack. As you know, we have a long-term relationship with Bechtel. We work very closely with them on trying to manage those inflationary costs. The workforce is getting tighter out there. We’re over 3,000 workers at Corpus right now, should be close to 4,000 by the middle part of this year. They haven’t had an issue with finding workers or worker availability, which is why they’re extremely ahead of schedule. So I’m very pleased with their performance. We know we pay for it, but they deliver and it’s a match made in heaven quite honestly, when they’re able to deliver those trains early, and we’re able to capitalize on the benefits of having that production early. So I believe we’ll be able to manage the SPL expansion costs in a way that meets all of our environmental or all of our financial criteria and make sure that we continue to add meaningful value for our shareholders.
Zach Davis: And I’ll just add, it comes back to the discipline because if we’re not going to be able to build around that 6x to 7x CapEx to EBITDA, it’s a lot easier to continue to just keep on buying back the stock and considering a multiple on a company like Cheniere without even accounting for like the brownfield growth prospects we have, the fact that we give run rate at 200 to 250 and we don’t even show the capturing of all the optimization that every single quarter, even the past one we’ve done, it’s unaccessibly too low when you’re talking about something under 10x. So we will be patient on this. But clearly, we’re doing the work already with Bechtel to have a decent sense, and that’s why we’ve signed a few contracts already for the Sabine expansion.
And if yes, if say there were a delay of FID by a year, give or take. That’s just another $3 billion to $4 billion coming up through the system, meaning that the re-upsized buyback plan that we’ll announce later this year will just be finished quicker.
Benjamin Nolan: Got it. I appreciate it. And then if I could for my follow-up to Anatol. It seems like really, I don’t know, since the first of the year, maybe even with the start of the pause long term, SPLs for U.S. projects have been pretty slow. There’s maybe only one or two that I’ve seen. Is it pause related? Is it price related? Is it just sort of LNG prices are a little bit lower and that causes a lack of urgency on the part of buyers? Or is it none of those things. It’s just sort of process of time, do you think?
Anatol Feygin: Yes. Thanks, Ben. It’s hard to pinpointed this precisely, but 150 million tons that the industry executed in ’22, ’23, again, was an unprecedented amount of contracting. And so can I say that the pause is having no effect on discussions? No. But as you know, it does not materially affect our timing for midscale 8 and 9 or for the SPL 5 expansion. Our counterparties know that, understand that. But as you said, there’s a more methodical approach today than there was 12 or 24 months ago.
Operator: And our next question comes from Jason Gabelman with TD Cowen.
Jason Gabelman: The first one is maybe somewhat mechanical. You mentioned $950 million left on the buyback authorization. You obviously did $1.2 billion in 1Q. So if you want to keep up that pace, you’re going to have to do an authorization this quarter. I guess, when is the earliest potential opportunity to reupsize the buyback authorization?
Zach Davis: Well, it’s not going to be this quarter, and we’ll continue to work with the Board over the next few months and even quarter or so and see where we are. And honestly, it depends on how — how fast we deploy that $950 million. The more that the price stays around this level, yes, it will be sooner rather than later. But the commitment is by later this year, we’ll have an upsized plan. and keep on trucking along to get that share count down to closer to $200 million.
Jason Gabelman: Okay. Got it. And then the second one is just going back to supply-demand balance outlook and you’ve commented on the demand quite extensively, but it seems like — some of your larger peers are discussing delays to industry capacity coming online. And I’m wondering if you’re noticing that to any extent where capacity that was expected to come online in 2025 is now shifting out to the right — are you seeing anything to that extent? Can you quantify maybe any amount of volumes that you expect to come online in 2025 for the industry being pushed out?
Jack Fusco: First, Jason, I’m very, very pleased with the performance of my E&C team. And as you know, at Cheniere, we try to make it look easy, and it’s really not, and that’s what you’re hearing from all of our colleagues, peers, competitors out there that are talking about delays or maybe having trouble going from commissioning to operations. So I’m very pleased with the way we’ve been able to build our facilities on time and on budget and the way our handoff is from E&C to operations. But as far as actual quantities, I don’t know, Anatol, do you have a comment.
Anatol Feygin: Yes. Jason, I’ll just say, historically, roughly 2/3 of projects in LNG are delayed. Cheniere, as Jack already mentioned, has been the anomaly with us running on average 9 months ahead of schedule for trains. And you’re certainly seeing that, right? You’re seeing that projects that FIDs in ’19 are going to now come online most likely middle of next year, maybe into the second half. You’re seeing that phenomenon globally by some measurements you can say, QE FID, the North Field expansion in ’17, and that is going to come online in the coming year, 1.5 years or so. If you want to take a look at Wood Mac, it has reset its forecast and when these things are projected, everyone has roughly the same number and the number stacks up very consistently.
And as prosecution of these projects gets into kind of the craft labor mode, you see those numbers come down quite dramatically, both in terms of volume per year as well as years added to execution. So I think tens of millions of tons will be smoothed out. We’ll have a lot more information over the next year or so of the projects in the Gulf Coast really enter the craft labor phase. But the market is certainly starting to see that now. And Wood Mac has already started to revise its forecast.
Operator: And our next question will come from Craig Shere with Tuohy Brothers.
Craig Shere: Anatol, there’s a lot of discussion on the call and other company calls about the growth in global power demand and AI and data centers. As we kind of look back a couple of years ago, probably Europe and maybe some other locations, we’re thinking about LNG long term as being the transition fuel and intermittent — backup for intermittent renewables. But are you seeing a change in mindset as people start thinking about a systemic need for more baseload power versus just backup power or transition fuels?
Anatol Feygin: Thanks, Craig. It’s a little bit of an unfair question because the people that we engage with have always thought that, right? Like we don’t talk to the 1,000 counterparties in the world. We talk to the 3 or 4 dozen that think of things that way. And I will just say that backup to intermittency is still very much part of the equation, and that is a role that obviously our product plays very well. And that is something that, especially the portfolio players think about as they enter these engagements. But — but clearly, our sort of load-serving counterparties think of our product as a baseload product. And that is something that clearly has very good traction. But to be fair, more so in Asia than in Europe.
