Cheniere Energy (LNG) Q3 2019 Earnings Call Transcript

Cheniere Energy (LNG -0.73%)
Q3 2019 Earnings Call
Nov 01, 2019, 11:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good morning and welcome to the Cheniere Energy, Incorporated third-quarter 2019 earnings call and webcast. Today's conference is being recorded. And at this time, I'd like to turn the conference over to Randy Bhatia, vice president of investor relations.

Randy Bhatia -- Vice President of Investor Relations

Thanks, operator. Good morning, everyone, and welcome to Cheniere Energy's third-quarter 2019 earnings conference call. The slide presentation and access to the webcast for today's call are available at cheniere.com. Joining me today are Jack Fusco, Cheniere's president and CEO; Anatol Feygin, executive vice president and chief commercial officer; and Michael Wortley, executive vice president and CFO.

Before we begin, I would like to remind all listeners that our remarks, including answers to your questions may contain forward-looking statements, and actual results could differ materially from what is described in these statements. Slide 2 of our presentation contains a discussion of those forward-looking statements and associated risk. In addition, we may include references to certain non-GAAP financial measures, such as consolidated adjusted EBITDA and distributable cash flow. A reconciliation of these measures to the most comparable GAAP financial measure can be found in the appendix to the slide presentation.

As part of our discussion of Cheniere Energy, Inc.'s results, today's call may also include selected financial information and results for Cheniere Energy Partners LP, or CQP. We do not intend to cover CQP's results separately from those of Cheniere Energy, Inc. The call agenda is shown on Slide 3, Jack will begin with operating and financial highlights, Anatol will then provide an update on the LNG market, and Michael will review our financial results and guidance. After prepared remarks, we will open the call for Q&A.

I'll now turn the call over to Jack Fusco, cheniere's president and CEO.

Jack Fusco -- President and Chief Executive Officer

Thank you, Randy, and good morning, everyone. I'm pleased to be here today to discuss our results and accomplishments for the third quarter of 2019 as well as our outlook for 2020, which we expect to be the record-setting year for Cheniere. The third quarter was yet another quarter highlighted by achievements across multiple facets of our business and operations in across both of our world-scale LNG facilities. Please turn now to Slide 5.

For the third quarter, we generated consolidated adjusted EBITDA of $694 million and distributable cash flow of approximately $200 million on revenue of approximately $2.2 billion. We recorded a net loss attributable to common stockholders of $318 million for the quarter, which was impacted by noncash derivative losses and an impairment to our investment in the Midship project and certain other items that Michael will discuss in a few minutes. Now looking forward to the rest of the year, we continue to expect our full year 2019 consolidated adjusted EBITDA to be in the range of $2.9 billion to $3.2 billion, and we expect distributable cash flow to be between $600 million and $800 million. For 2020, we expect significant growth in our financial results compared to 2019.

And today, we are introducing 2020 guidance for consolidated adjusted EBITDA of $3.8 billion to $4.1 billion, distributable cash flow of $1 billion to $1.3 billion and a CQP distribution of $2.55 to $2.65 per unit. Michael will cover our financial results and guidance in more detail in a few moments. During the third quarter, we signed our second integrated production marketing or IPM transaction, this time with EOG Resources, providing additional commercial support for Corpus Christi Stage 3. Under the terms of this deal, Cheniere will purchase 140,000 MMBtu of natural gas per day from EOG for a price linked to JKM, for a term of approximately 15 years.

LNG associated this gas supply, approximately 0.85 million tons per year, will be marketed and sold by our marketing affiliate. This transaction represents further progress on the commercialization of Corpus Christi Stage 3, and supports our expectation of a positive final investment decision on that project during the first half of next year. The success of the IPM structure is another tangible example of Cheniere's market-leading commercial innovation and demonstrates the value the market places on our ability to tailor solutions to meet the needs of our customers. We continue to pursue additional IPM transactions, primarily in the Permian, given Corpus Christi's advantaged location, with a focus on large investment-grade producers.

Train 2 at Corpus Christi reached substantial completion on August 28, 6 months to the day after the completion of Train 1 and became the seventh operational Cheniere train. Train 2, like the six trains before it, was completed ahead of schedule and within budget. In the first three quarters of 2019, we reached substantial completion on 3 trains for approximately 15 million tonnes of liquefaction capacity, with each train an average of more than 9 months ahead of schedule, a product of years of development and the hard work of thousands of dedicated Cheniere and Bechtel professionals. This achievement further reinforces our global reputation for best-in-class project execution, and I'll speak more about the continued progress on our liquefaction projects in a few minutes.

In September, the data first commercial delivery, or DFCD, was reached under the 20-year contracts with both Centrica and Total, associated with the Train 5 at Sabine Pass. So the transformation of our cash flows continues as we have commenced 13 of our creditworthy customers under this long-term take-or-pay style contracts. Also during the third quarter, we achieved some significant milestones in the execution of our balance sheet and capital allocation strategies. We recently refinanced debt at both CQP and Corpus Christi, and the latter was upgraded to investment-grade credit ratings by both S&P and Fitch during the quarter, a milestone achievement for the Corpus Christi project.

In addition, we commenced debt repayment. Prepaying a portion of the Corpus Christi credit facility in support of our long-term balance sheet strategy to achieve consolidated investment-grade credit metrics at all rated entities over the next few years. We also continued purchasing shares in the market opportunistically, with approximately 2.5 million shares repurchased in our third quarter. We have now repurchased approximately 1% of our outstanding shares since the program commenced in late June.

Operationally, we produced and exported 108 LNG cargoes during the third quarter, a new quarterly record. And in October, we exported our 850th cargo. In addition, we completed additional successful maintenance turnarounds at Sabine Pass in support of our 2019 maintenance program. The turnarounds for Trains 3, 4 and 5 involved over 490,000 manhours and 2,700 work orders, like the turnaround, for Trains 1 and 2 earlier this year, was accomplished ahead of schedule, on budget and most importantly, with no safety incidents.

Congratulations to Aaron Stephenson and the Sabine Pass team on further demonstrating the safety first culture of Cheniere's operations. Now turn to Slide 6 for an update on our liquefaction project operations and development. Since liquefaction operations began in early 2016, we have loaded and exported over 850 cargoes from our two projects, or approximately 60 million tonnes of LNG. And as I mentioned earlier, our seven operating trains have all entered service early, on average, over seven months ahead of the guaranteed completion dates.

As a result of early completions and excellence in operations, our marketing affiliate has been able to sell over 200 cumulative cargoes of incremental LNG into the global market, a significant benefit to Cheniere and our shareholders. We remain laser-focused on maintaining excellence in execution as both Sabine Pass Train 6 and Corpus Christi Train 3 progress through construction. At Sabine Pass Train 6, Bechtel continues to progress construction efforts against an accelerated schedule. The project completion for Train 6 is over 38% as of the end of September.

Construction is ramping up with headcount now over 500 and activities focused on foundation and column work and commencing structural steel. Bechtel is currently projecting substantial completion of Train 6 in the first half 2023. And at Corpus Christi Train 3, Bechtel continues to progress construction efforts against an accelerated timeline. There are over 2,000 workers currently on-site for Train 3, and the project is over 2/3 complete as of the end of September.

Construction activities are focused on structural steel, above ground piping installations, mechanical and instrumentation activities and recently, the Concrete Roof 4 was completed on the third LNG storage tank. Bechtel now projects substantial completion of Train 3 in the first half of 2021, an acceleration from the previously projected target of the second half of 2021. Our development efforts on Corpus Christi Stage 3 continue, and that project remains on the expected timeline we have previously communicated. We continue to expect to reach FID for Stage 3 in 2020.

We are currently in the process of evaluating EPC bids, and we intend to have a cost-competitive, fully wrapped lump sum turnkey EPC contract in place over the next few months. On the regulatory front, we continue to expect whole regulatory approvals for Stage 3 by the end of the year. And on the commercial side, significant progress has been made already with our IPM transactions with Apache and EOG, and Anatol will speak in a minute on what we see in the market today that gives us confidence in commercial momentum to enable an FID of Stage 3 next year. Before turning the call over, I'll briefly outline what I see as some of Cheniere's key priorities for 2020.

First and foremost, we plan to deliver on the 2020 financial guidance we rolled out today. We have good visibility into next year, and 2020 should feature less volatility than 2019, given that much more of our overall production next year will be under long-term contracts, and there are no new trains scheduled to enter service next year. Another key priority for 2020 is to maintain our reputation for operational excellence. Our track record in LNG development, execution, and operations is a key differentiator and a key competitive advantage, and it is imperative that we keep our eyes on the ball.

In May of 2020, we expect to reach DFCD with respect to Train 2 at Corpus Christi and commence the long-term SPAs tied to Train 2. In 2019, our teams have done a tremendous job of onboarding new SPA customers with the DFCDs of contracts tied to Corpus Christi Train 1 and Sabine Pass Train 5, as well as some of our marketing SPAs, and we expect that performance to continue next year. As I have already mentioned, we expect to reach FID for Corpus Christi Stage 3 next year. Stage 3 is an attractive growth project, which will leverage a significant amount of infrastructure we've built in Corpus.

We look forward to receiving our third permit later this year and finishing the remaining steps of commercialization and financing ahead of a full FID. And finally, in 2020, we will continue to pursue additional development opportunities to maintain our growth momentum. We have an incredible infrastructure and land position in Corpus Christi, which we expect will enable further brownfield expansion economics for future liquefaction projects. In addition to our own infrastructure.

This location is proximate to significant new pipeline development and natural gas resources. Our Corpus Christi project is by far the closest LNG project, either in operations or development, to the Permian Basin. Also, our site is an ideal location to match new gas supply with global LNG demand over the long term. Our project development focus in 2020 is leveraging those advantages to expand our LNG footprint in Corpus Christi beyond Stage 3.

And now I'll turn the call over to Anatol.

Anatol Feygin -- Executive Vice President and Chief Commercial Officer

Thanks, Jack, and good morning, everyone. Please turn to Slide 9. 2019 has continued to be a year of substantial global LNG supply growth. After adding a record 12 million tonnes of supply in the second quarter, another 10 million tonnes of supply was added in the third quarter.

Full year 2019 is on pace to add about 40 million tonnes of supply, which will be a new yearly record. This year's supply growth has been driven largely by U.S. projects, including our projects, with substantial completion achieved for Corpus Christi Train 1 and Sabine Pass Train 5 in the first quarter and for Corpus Christi Train 2 in August. Other U.S.

projects have also reached recent milestones as Freeport Train 1 exported its first cargo in September and the first train at Elba Island recently entered commercial service. Incremental supply during the third quarter was absorbed primarily by Europe. The region continued its global balancing role as we also saw in the first half of the year. Europe imported a record 18.4 million tonnes during our third quarter, which nearly double the import level as compared to a year ago.

As this year's rapid supply growth has outpaced Asian demand growth, pushing incremental supplies to Europe and driving down spot prices, we have also seen a convergence of European and Asian spot gas prices. This spot price markers most commonly used in Asia and Europe, JKM and TTF, respectively, have occasionally shown some deviations, but generally, spreads between the two have narrowed as compared to previous years. In contrast to the decrease in TTF and JKM prices, Brent equivalent pricing continued to diverge and generally traded above the $10 an MMbtu level during the third quarter, more than three times higher than Henry Hub and almost double TTF and JKM levels. Please turn to Slide 10.

European imports were lower quarter on  quarter but remained well above prior year's levels. The quarter-on-quarter slowdown in imports was driven by strong storage levels and low gas prices in Europe and by an increase in imports into traditional counter-seasonal markets and emerging Asian markets. European gas storage levels have continued to be above the five-year range, and storage was reported to be close to 100% full in the middle of October. These storage levels have allowed spot LNG prices to remain low, and the European market to remain comfortable with supply and demand dynamics heading into the winter withdrawal season.

Though negative news flow on Groningen, French nuclear facilities and lack of progress on the Ukraine transit agreement during the quarter are potential tailwinds. Pipeline flows into Europe also fell off during the third quarter, helping to balance the market. All three regional flows into Europe, from Russia, Algeria and Norway, were lower quarter on  quarter, and Norway had the largest decline, flowing 22% less than in the third quarter of last year. Low gas prices and strong LNG imports have also incentivized increased gassified power generation.

Spain has had the most noticeable response, increasing its gas power generation by 58% in the third quarter as compared to last year. A similar story in Germany, where gas power generation rose by 39% year on  year in the third quarter. While hydro and renewables have oscillated in both countries, natural gas, supported by low prices and a strong carbon price, is taking market share away from coal. Please turn to Slide 11.

Asian LNG imports in the third quarter were slightly higher than 2018 and continued to trend above the 5-year range. Strong nuclear generation from legacy LNG consumers in Japan, South Korea,and Taiwan has placed downward pressure on LNG imports this year. Lower imports from Japan and South Korea were offset by strong imports in the third quarter from China, India, Bangladesh, Pakistan and Malaysia, all of which have experienced double-digit growth from last year. Now looking ahead, there are several developments and themes worth following that are expected to be favorable to Asian LNG demand growth.

In Japan, there have been challenges in complying with anti-terrorism retrofits on time at nuclear facilities, resulting in the potential closure of 12 gigawatts of nuclear capacity. In South Korea, there are plans for more temporary closures of coal-fired power plants during winter. A proposal was submitted to the President of South Korea to close 14 coal-fired plants from December to February and another 22 in March, in addition to our five currently scheduled to be closed from March to June. China recently announced a target to replace dispersed coal with clean heating options this year.

5.2 million households across 28 cities are targeted to switch to cleaner burning options, 45% higher than in 2018. While the impact on gas demand based on this policy is not yet known, it's a good example of China continuing to implement environmentally driven policies, which should incentivize stronger gas demand going forward. As we look toward winter and 2020, the market continued to absorb the recent amounts of new supply that have come online. At 40 million tonnes, the LNG supply growth this year has been unprecedented.

However, this wave is well over 80% behind us, now only 24 million tonnes or about 17% of incremental supply forecast to come online between now and the end of next year. Asian demand has continued to grow, and Europe has largely balanced the market, in part of building the muscle memory of natural gas imports and consumption. The forward margin curve remains in steep contango, and margins, while not what I would characterize as robust, are fairly healthy, only a couple of quarters out of the curve. We continue to expect that the prospects for global natural gas demand growth, our commercial momentum and our advantaged position of U.S.

Gulf Coast LNG exports will enable us to capture significant additional term economics. We remain confident that these efforts should also aggregate sufficient commercial support for Corpus Christi Stage 3 and move forward next year. Thank you for your time and attention. I'll turn it over to Michael, who will review our financial results.

Michael Wortley -- Executive Vice President and Chief Financial Officer

Thanks, Anatol, and good morning, everyone. Turning to Slide 13. For the third quarter, we reported a net loss of $318 million, consolidated adjusted EBITDA of $694 million and distributable cash flow of approximately $200 million. For the 9 months ended September 30, we reported a net loss of $291 million, consolidated adjusted EBITDA of approximately $2 billion and distributable cash flow of approximately $520 million.

As Jack mentioned, during the third quarter, net loss was negatively impacted by an impairment of approximately $80 million to our equity investment in the Midship project. This is due to cost overruns and extended construction timelines at the Midship project, resulting in a reduction of the expected fair value of our equity interest. The net loss of the quarter also included an approximately $140 million noncash loss from changes in the fair value of commodity derivatives, primarily related to our gas supply contracts and an approximately $80 million noncash loss related to interest rate derivatives. We exported 383 TBtu of LNG from our liquefaction projects during the third quarter, an increase of 22 TBtu over the second quarter, primarily due to incremental commissioning and operational volumes from Corpus Christi Train 2, which was completed and placed into service in August.

We exported 20 TBtu of commissioning volumes during the third quarter related to Train 2. For the 9 months ended September 30, we exported over 1,050 TBtu from our liquefaction project. For the third quarter, we recognized an income 364 TBtu of LNG produced at our liquefaction projects, consisting of 364 TBtu loaded during the quarter, plus 36 TBtu loaded in the second quarter but delivered and recognized our third quarter, less the 36 Tbtus sold on a delivered basis and in transit at the end of the third quarter. We also recognized an income 8 TBtu of LNG that was sourced from third parties.

Approximately 73% of 364 TBtu recognized in income from our projects during the quarter was sold under long-term SPAs, and the remaining 27% was sold by our marketing affiliate, either into the spot market or under short and medium-term contracts. Volumes sold under long-term SPAs increased by 38 TBtu compared to the second quarter, driven by a full quarter of volumes under the SPAs related to Corpus Christi Train 1, which reached DFCD on June 1 and by volumes under the SPAs related to Sabine Pass Train 5, which reached DFCD on September 1st. For the nine months ended September 30th, we recognized an income 998 TBtu of LNG produced at our liquefaction projects, of which 73% was sold under long-term SPAs. We also recognized an income 31 TBtu of LNG sourced from third parties.

Operating income for the third quarter was $307 million, a decrease of $125 million compared to the second quarter. The decrease in operating income was primarily due to decreased total margin and a slight increase in total operating costs and expenses, primarily related to Corpus Christi Train 2, for which revenue and cost began to be recognized in income after substantial completion in late August. Total margins, or total revenues less cost of sales, decreased by $112 million in the third quarter as compared to the second quarter due to increased mark-to-market loss from changes in fair value of commodity and FX derivatives, partially offset by an increase in LNG volumes recognized in income. Margins per MMBtu of LNG recognized in income were materially consistent between quarters, as lower LNG market pricing was largely offset by lower natural gas feedstock costs.

Regarding the net loss from changes in fair value of commodity and FX derivatives, the impact is primarily related to changes in the fair value of agreement for the future purchase of natural gas. Certain of our gas supply agreements, including our IPM agreements, qualifies derivatives and require mark-to-market accounting. From period to period, we will experience noncash gains and losses as price or basis movements occur with underlying commodities related to these forward contracts for purchase of natural gas. While operationally, we seek to eliminate commodity risk by matching our gas purchases and LNG sales on the same pricing index, our long-term LNG SPAs do not currently qualify for mark-to-market accounting, meaning that the fair value impact of only one side of the transaction is recognized until the delivery of natural gas and sale of our LNG occurs.

We anticipate that this accounting treatment mismatch will cause some volatility in our financial statements over time in the form of noncash gains and losses, which will be reflected primarily in cost of sales. For the third quarter, the net noncash impact of changes in fair value of commodity and FX derivatives was a loss of approximately $140 million. And year to date, September 30, the impact was a gain of approximately $40 million. Net loss attributable to common stockholders for the third quarter was $318 million or $1.25 per share compared to net loss of $114 million or $0.44 per share for the second quarter.

The increase in net loss was driven primarily by increased operating income, increased other expense related to the impairment of our equity investment in Midship, increased interest expense and increased loss on extinguishing debt, partially offset by decreased net income attributable to noncontrolling interest. Net income attributable to noncontrolling interest decreased compared to the second quarter due to a decrease in net income recognized by CQP, in which the noncontrolling interests are held. Please turn to Slide 14, where I will discuss 2019 and 2020 guidance. Looking forward to the remainder of 2019, as Jack and Anatol discussed, we continue to see a relatively soft short-term LNG market environment.

However, we continue to have strong operating performance and have effectively hedged most expected production volumes for the remainder of the year. We remain on track to deliver consolidated adjusted EBITDA for the full year within our guidance range of $2.9 billion to $3.2 billion and distributable cash flow within our guidance range of $0.6 million to $0.8 billion. Also, today we are issuing 2020 consolidated adjusted EBITDA guidance of $3.8 billion to $4.1 billion and distributable cash flow guidance of $1 billion to $1.3 billion and a CQP distribution of $2.55 to $2.65 per unit. We expect stable operation during 2020, with seven trains in service throughout the whole year and with the SPAs related to 6 of those trains already in effect and the SPAs for Corpus Christi Train 2 expected to reach DFCD in May 2020.

The total volume produced at our facilities in 2020, we expect approximately 7.5 million tonnes to be available to our marketing affiliate, down from over 9.5 million tonnes in 2019, and a significant portion of that capacity has already been hedged, either physically or financially. This forecast considers production efficiencies as well as maintenance optimization, debottlenecking the efforts, which have been now implemented throughout this year. Our marketing volume forecast for next year is weighted toward the first half of the year due to the timing of DFCD for Corpus Train 2 SPAs. And we have been actively preselling some of these volumes in both the physical and financial markets.

We currently forecast that a $1 change in market margin would impact EBITDA by approximately $100 million for full year 2020. Turn now to Slide 15. During the third quarter, we completed several transactions which advanced key initiatives related to our long-term balance sheet management and capital allocation strategy. In September, CQP issued $1.5 billion of 4.5% senior notes due 2029 to prepay all of the outstanding term loan under the CQP credit facilities and to fund future capital expenditures related to construction of Sabine Pass Train 6.

Financing Train 6 at the CQP level has allowed us to bolster the resilience of SPL's investment grade credit rating and is a step toward our longer-term goals of desecuritizing our balance sheet and achieving investment-grade credit metrics throughout our corporate structure. In September, Corpus received investment-grade senior secured debt ratings from S&P and Fitch, and in October, received an investment-grade issuer default rating from Fitch. Subsequent to Corpus receiving these IG ratings, we issued $727 million of 4.8% senior notes due 2039, pursuant to the previously announced private placement transaction with Allianz, the closing and funding of which was contingent upon Corpus receiving the IG rating. In October, we entered into another private placement transaction with accounts managed by BlackRock and MetLife, issued $475 million of 3.925% senior notes due 2039.

The proceeds of these two private placements were used to prepay outstanding amounts under the Corpus credit facility. Those sets of notes are fully amortizing with a weighted average life of 15 years and they help us achieve our broader balance sheet goals of strengthening project level credit metrics and reducing consolidated leverage over time. Finally, in support of our capital allocation framework, during the third quarter, we repurchased approximately 2.5 million shares of our common stock for a total of $156 million under our share purchase program, and we commenced deleveraging by prepaying approximately $70 million of outstanding borrowings under the Corpus credit facility. That concludes our prepared remarks.

Thank you for your time and your interest in Cheniere. Operator, we're now ready to open the line for questions.

Questions & Answers:

Operator

[Operator instructions] And we will go first to Jeremy Tonet at JP Morgan.

Jeremy Tonet -- J.P. Morgan -- Analyst

Good morning.

Jack Fusco -- President and Chief Executive Officer

Good morning, Jeremy.

Jeremy Tonet -- J.P. Morgan -- Analyst

I want to start off with the 2020 EBITDA guidance, a very strong number, it looks like there. I'm just wondering if you could share any more behind what assumptions are embedded there? You talked about a lot being hedged or being sold forward? And you talked about the sensitivity, $1 versus $100 million. But just try to see, does that price deck being employed there, is that the same as the 2019 levels or is that where the strip set now? Or anything else that you could share us as far as the sensitivities that would drive the top versus bottom of that range?

Michael Wortley -- Executive Vice President and Chief Financial Officer

Sure, Jeremy. Hey, it's Michael. I'll start with production, I guess, for 2020, it will be a big production year for us, obviously. We'll end up probably in the mid-30s in terms of nTPA for the year.

We've guided to $4.7 to $5.0 per train SPL, will be at the top end of that range. That range is supposed to be a 20-year average, building in all of the maintenance plans. The next year's going to be a low -- certainly a low planned maintenance year for Sabine, so that we'll drive a lot of production out of that facility. I mean -- Corpus will be at the lower end of the range, just given where it is in its ramp up.

We have some debottlenecking efforts under way that should bear fruit over the next couple of years but for next year, kind of at the lower end of the range. And I guess -- in terms of percent contracted and kind of EBITDA margin sensitivities, as we said in the remarks, 2020 will be about 7.5 million tonnes left in the CMI book, down from 9.5 million tonnes, almost 10 million tonnes this year, so down about 20%. Out of that 7.5 million tonnes, as we said, we've been actively putting that away. Of course, CMI quite a fair amount of long-term contracts in its book right now, so if you back that off and then back off all of the shorter-term stuff that we've already put in place for next year, back off the financial hedges we have in place, it nets down to something like 100 TBtu left or about 2 million tonnes of unsold.

So in terms of margin certainty for us next year, it's kind of in the mid-90s percentage range. So we feel like 2020 is generally put to bed on the margin side. So don't expect really much sensitivity next year. We say $1 move is $100 million, to the extent we get into the year, probably the position to tighten our EBITDA guidance range down once we get some of that behind us, but that's really the big driver for us at this point.

And of course, it's not very big.

Jeremy Tonet -- J.P. Morgan -- Analyst

Mid-90s. That's great to hear. And Jack, just want to -- a second question here. As far as the stock price, I know that you've talked before as far as frustration and holders of the stock have -- frustrated with the market seeming to not, kind of recognize the stability in your cash flows.

Just wondering, how you think about that now? What levers you have to pull to try to address that or any thoughts you could share there?

Michael Wortley -- Executive Vice President and Chief Financial Officer

Well, I -- Jeremy, over the long term, I think our capital allocation strategy is the right one. So when we see weakness in the stock price, as you can tell from the Q, we're pretty aggressively buying out there. We don't need to sell stock for -- to raise capital or -- our plans call for us to generate cash that we can reinvest in the business for our expansion plans. We'll pay down our debt to get our balance sheet, and we're going to be -- continue to be very opportunistic about buying back our stuff.

Jeremy Tonet -- J.P. Morgan -- Analyst

That's helpful. That's it for me. Thanks.

Michael Wortley -- Executive Vice President and Chief Financial Officer

Thanks.

Operator

We'll move next to Christine Cho at Barclays.

Christine Cho -- Barclays -- Analyst

Good morning, everyone. The $1 change in market margin, changing your 2020 EBITDA by $100 million was helpful. Are you willing to share with us what the average marketing margin is assumed in your guidance after factoring in all the long-term and short-term and financial hedges you've put in? I ask because the 2020 guidance that you gave is the same as a seven-train run rate guidance that you gave at your Analyst Day couple of years ago, which obviously makes sense because you're running seven trains. But I think in that analysis, you had assumed $2.50 as your CMI margin.

So I'm just trying to get a sense of how far off we are from that initial metric?

Michael Wortley -- Executive Vice President and Chief Financial Officer

Yes. Hey, Christine, it's Michael. Yes, I mean, you got it. We're not getting $2.50 obviously.

The book's more like, a little under $2 next year. So that's a headwind versus the guidance we put out, of course, that's offset by the fact that production is much higher than we thought it was going to be back when we put out that guidance in '17 and updated in '18. And then the other thing I'll point out, it's kind of along the same lines. This run rate guidance assumed a full year of Train 2, where as next year, obviously, we only have until starting in May in terms of DCFD.

So all those puts and takes equal out to us being able to stay in that guidance.

Christine Cho -- Barclays -- Analyst

OK, great. That's helpful. And then earlier this year, I saw that CMI entered into an agreement with SPL for up to 20 cargoes this year. The standard 115% of Henry Hub plus $2 per MMBtu.

I guess is this was driven by trying to create more stability for CQP versus the standard 80-20 sharing agreement you have. But should we think that these sorts of agreements like, might this continue into the future if spot prices are low or volatile or did it just make more sense for 2019 because you had higher than normal side exposure?

Jack Fusco -- President and Chief Executive Officer

Christine, this is Jack. So there's a couple of reasons, and you've touched upon all of them. One is we feel that CQP gets rewarded on its share price for having stability in its cash flows, and this helped deliver that. It also helps us at CMI cover some of our positions and have some certainty on that price of what that is.

So you should expect us to continue to try to work closely and collaboratively with our board at CQP as well as CMI, and make sure that those deals are a win-win for both parties.

Christine Cho -- Barclays -- Analyst

OK. So we shouldn't be surprised if we see, like this, this kind of continue going forward?

Jack Fusco -- President and Chief Executive Officer

No, it shouldn't be a big surprised.

Christine Cho -- Barclays -- Analyst

OK. Thank you.

Operator

Our next question comes from Ben Nolan at Stifel.

Ben Nolan -- Stifel Financial Corp. -- Analyst

Great. So I have -- my first question relates to something that came up on the BP Conference Call earlier this week. They indicated that they thought the global gas market was oversupplied. There was a pretty strong chance that as some of the U.S.

capacity might actually need to be backed off a little bit or operate at lower utilizations to help balance the market. And curious if you guys see the same thing or if there might -- how that might play out if there are other [Inaudible] and around the world that might come off first, perhaps?

Jack Fusco -- President and Chief Executive Officer

Ben, this is Jack. I'll start off, and then have Anatol to give his opinion, and it never ceases to amaze me that we keep getting this or having a conversation of the U.S. LNG in the part that customers won't lift because we are extremely competitive worldwide. And as Anatol mentioned, there's a lot of infrastructure that continues to be built in support to natural gas consumption worldwide, and we feel very, very good about our position in the world market and our customers' position on how they are utilizing nat gas in that overall cost of production.

But, Anatol, what --

Anatol Feygin -- Executive Vice President and Chief Commercial Officer

Thanks, Ben. Just to follow on Jack's comments, number one, this supply wave from '16 through next year is about 150 million tonnes, as we' said in the prepared remarks, a little over 20 million tonnes left to go. So the global LNG market today is about 360 million tonnes, 370 million tonnes sort of current monthly run rate, that's 50 Bs a day or so. Our gas supply team, Corey takes about 5.5 Bcf of gas to our plants alone, the U.S.

is 7.5 Bcf. So number one, I think we're very much closer to the end of this supply of wave. Obviously, the question of how quickly the world absorbs that is in part weather, but certainly, we fully expect the emerging markets and actually, old World Europe, to continue to grow and have fundamental demand growth. Number two, you switch off 15% of global supply, is going to have quite -- have an impact on Henry Hub here and LNG prices globally, so we don't expect that to happen.

We think it's very rapidly self-correcting. So of course, that the LNG world does not run off the spot spreads, right? Neither physically nor financially. So we think there is a good chance that we're in another nine to 12 months of a steep contango. And as Michael discussed and Jack discussed earlier, we'll take advantage of that contango and secure margins for ourselves.

Ben Nolan -- Stifel Financial Corp. -- Analyst

Great. I appreciate that color. I thought that's what you want to say. The other question is about the guidance for 2020 and the EBITDA guidance just came up earlier is as you laid out in terms of the absolute numbers, 4.7 MTPA train run rate.

But the DCF guidance was a bit different, which I the  thought was odd given EBITDA being the same. Any color as to what is happening on the DCF side, relative to the EBITDA guidance?

Michael Wortley -- Executive Vice President and Chief Financial Officer

Yes, Ben, it's Michael. Thanks for asking that. I should have clarified that last -- in the last question. So the only difference there is, some of the same things I mentioned, $250 million margin, not a full year of DFCD on Train 2, but the big one is Train 6 equity down at CQP.

So remember, we're 50-50 financing that train at CQP, that results in slower distribution growth, so we're forgoing some distributions today, which is impacting our DCF, right? We only count what comes out of CQP to us and CEI dcs, and so we're foregoing that today for a much larger distribution later. So that's this reconciling item.

Ben Nolan -- Stifel Financial Corp. -- Analyst

Got it. Appreciate it. Thanks, guys.

Operator

Moving next to Julien Dumoulin-Smith at Bank of America.

Julien Dumoulin-Smith -- Bank of America Merrill Lynch -- Analyst

Hey. Good morning, team.

Jack Fusco -- President and Chief Executive Officer

Good morning, Julien.

Julien Dumoulin-Smith -- Bank of America Merrill Lynch -- Analyst

So perhaps just to follow-up a little bit more on Christine's question. Can you talk about some of the sort of, let's call it, like this normalized guidance for the multi-train scenarios that you've released in the past? Obviously, there was a little bit of largely in line, but a little bit of discrepancy relative to that guidance, more on the cash flow side than the EBITDA side. Can you also talk about some of those, the puts and takes, again, a little bit more discretely and then kind of apply that, if you can, for the other guidance levels that you've articulated for the future train?

Michael Wortley -- Executive Vice President and Chief Financial Officer

Yes. I mean, it's Michael. Again, sticking with all of the future train guidance, whether it's the 9 we rolled out and even the Stage 3 preliminary guidance we gave on this year. Again, it's those 3 items for EBITDA, I mean, it's -- I guess, and -- we're not getting $2.50, which is what's in there, but we have higher production, which is offsetting that.

And we don't have a full year of the $3.50 contracts, which will come with the DFCD of Train 2. Those are both impacting 2019 but leaving us in the same place as the guidance we said in 2017, and DCs has this added difference of Train 6 equity being funded by withholding distributions from us, which will ultimately come.

Julien Dumoulin-Smith -- Bank of America Merrill Lynch -- Analyst

Got it. So nothing else ever on costs, etc. But if I can pivot a little bit, a different direction, maybe more of a Jack question. We've seen Dominion out there selling down a stake in their business of late.

Obviously, more discrete to them in their long-term financing decisions. I know that folks -- and you all just talked about CQP, but I'd be curious, I mean, could we potentially go back the other way, with respect to Corpus Christi? I know you guys are trying to simplify things, but at the same time, if you find these in particularly attractive cost to capital out there that we've seen with some of your peers, is there also now anything out there on that? Any thoughts?

Michael Wortley -- Executive Vice President and Chief Financial Officer

Yes. Well, Julian, I have to tell you, congrats to Dominion. I mean, I -- when we look at that, it looks like they got 12x EBITDA for that, for a noncontrolling piece of an LNG facility, which is fantastic for our complex overall. But I think, look, different owners of these LNG terminals will have different needs for cash.

We're pretty pleased with our capital structure and our performance year to date. We're happy to give guidance that is relatively consistent. What we've told you we're going to do years ago, and we're just going to keep plugging away at our business.

Julien Dumoulin-Smith -- Bank of America Merrill Lynch -- Analyst

Fair enough. All right. Thanks, guys. I'll leave it there.

Operator

Moving next to Weber Research and Mike Weber.

Unknown speaker

Hey, guys. How are you.

Jack Fusco -- President and Chief Executive Officer

Hi, Mike.

Anatol Feygin -- Executive Vice President and Chief Commercial Officer

Hey.

Unknown speaker

Hey, Jack, I just wanted to come back to the question around Dominion, and maybe kind of think about that from a different angle, maybe not in the sense that you guys need to offload capex to a financial buyer. But I guess, I don't know if there's great way to put this in directly, but if you would just think about the multiple there that's implied for Dominion at 12 times, you mentioned that for a noncontrolling stake. But Jack, I'm just curious in terms of how you think about that multiple relative to CQP, and kind of the different aspects of it and how it's applicable to, obviously, what's happening with Corpus or with Sabine, a block that's getting shot now? There's no great indirect way to ask that. So I'm just going to go in that.

Jack Fusco -- President and Chief Executive Officer

Yes, yes. Look, we like both of our businesses, there is a significant spread, as we all know, between how CQP trades and how LNG trades. And at some point, the market will figure out which one's right, and we'll see what happens there. You can tell from our buyback program that we continue to like buying back our LNG stock at these prices and levels.

But we're -- I mean, I'm not going to get into trying to anticipate with one shareholder may do as far as their stock or their stock position. And it's really does not matter for us strategically. We continue to perform and execute on our business, and that's where we're going to stay focused on, is making sure that we hit all of our targets and we meet our commitments to all of you.

Unknown speaker

Got you. Appreciate that. A follow-up, just more on the market in general and it's a good one, I guess for Jack or for Anatol, but just given the context of your ongoing conversations with the Chinese, just gives in a while now. I'm just curious, one, how have those conversations changed since the trade war started? And then I know we probably picked at this in each earnings call, but at any given point, be it the demand for LNG is going to be a zero-sum game.

But over time, you can definitely see value leakage. I'm also just wondering, is there a point in time, we've already seen the Chinese help underwrite Arctic two. I'm sure they're being pitched fished aggressively out of West Africa. At what point do you think you start to see permanent market share loss from U.S.

gulf as the result of tariffs? Specifically within the context of a Chinese bid.

Jack Fusco -- President and Chief Executive Officer

Yes. So I'm going to take that in a couple of different ways. I mean, you just saw from Anatol's presentation that those were, they've had over 20 million tonnes of growth year over  year 10% --

Anatol Feygin -- Executive Vice President and Chief Commercial Officer

20%.

Jack Fusco -- President and Chief Executive Officer

20%. 10 million tonnes of growth this year. So they continue to use more and more LNG. We continue to work very closely with our counterparts there in China.

They are very interested in securing more Henry Hub, the trade tensions have gone on a little longer than I think any of us have anticipated, and we continue to work with this administration and other counterparts -- parts in China to make sure that we're on the right side of the relationship when or when things get better. So I mean, that's been our position from day 1, and it's the way we've conducted our business with China. But Anatol, you have anything else to --

Anatol Feygin -- Executive Vice President and Chief Commercial Officer

No. Just to echo Jack's comments. And Mike, as you know, we're -- continue to be very committed. We think it's a great opportunity.

We want to support China and its ambitions to grow gas to 15% of its economy and cleaner skies and have affordable, reliable solutions. So we are as engaged as ever and are looking forward to the right opportunities to consummate those.

Unknown speaker

Yes. Maybe the best way to ask is, do you think that Chinese bid getting directed elsewhere has helped underwrite any projects that wouldn't have gotten done anyways?

Jack Fusco -- President and Chief Executive Officer

No. I don't think any -- it wouldn't have gotten done. I think everything that's been dispatched to date that has China's involvement are projects that we fully expected to be dispatched, whether that's a type correlated.

Unknown speaker

OK. Great. That's helpful. All right, guys.

Thanks for the time.

Operator

And we'll go next to Michael Lapides at Goldman Sachs.

Michael Lapides -- Goldman Sachs -- Analyst

Hey, guys, thank you for taking my question. One operational one. Do you think, and if you do, can you talk about what it would take to achieve this, to be able to get above 5 million tonnes per year per train? Meaning, is there incremental operational upside potential that may exist over the longer term? And if so, and how do you achieve it?

Jack Fusco -- President and Chief Executive Officer

Yes, I do think, having worked closely with the operational team recently on our debottlenecking initiatives, I think the debottlenecking plan that they've put before us for some additional capital, and we could achieve over 5 million tonnes if necessary. But I think what you're hearing from Michael is, I guess -- we're trying to do all of the low-hanging fruit first due to debottlenecking that gets us as much LNG as we possibly can without having to invest large quantities of capital. But yes, Michael, yes I do think we can achieve numbers above that.

Michael Lapides -- Goldman Sachs -- Analyst

Is that something you think is in, kind of the next three to four years, three to five-year horizon or are you thinking that's kind of a longer-term kind of target?

Jack Fusco -- President and Chief Executive Officer

I think we will guide you appropriately when we get to that point. But for now, we're sticking with our original 20-year guidance.

Michael Lapides -- Goldman Sachs -- Analyst

OK. And then one follow-up, and this may be more of a Michael question. How are you thinking about the balance, like when you think about your cat year -- your debt capital structure, between wanting to have bullet debt versus having amortizing debt, and how you would go about changing that balance over time?

Michael Wortley -- Executive Vice President and Chief Financial Officer

Yes, that's a good question. I mean, the -- this foray to private placement markets and advertising markets, and we like it, it helps us achieve some of our deleveraging goals and kind of commits it -- commits us to it by entering into this self-amortizing debt, the rating agencies like that as well. I mean, the issue is, that's not a giant market. So we're going to be a big bullet issuer for a long period of time, and we'll opportunistically do these private placements when we can.

So yes, I mean, I think the larger part of our debt paydown's going to be paying down debt when we have bonds mature. It will be a mix. I couldn't give you a target.

Michael Lapides -- Goldman Sachs -- Analyst

OK. Thanks, guys. Much appreciated.

Michael Wortley -- Executive Vice President and Chief Financial Officer

Thank you.

Operator

And we'll go next to Craig Shere at Tuohy Brothers.

Craig Shere -- Tuohy Brothers -- Analyst

Good morning.

Jack Fusco -- President and Chief Executive Officer

Good morning.

Michael Wortley -- Executive Vice President and Chief Financial Officer

Good morning.

Craig Shere -- Tuohy Brothers -- Analyst

With respect to the unhedged equity cargoes, as we kind of add up availability, given the really good performance with Train 3 Corpus construction, do any of your EDP traffic or Petrochina contracts have automatic step-ups at Train 3 completion? And a couple of other quick ones. Would any ultimately finalized Chilean LNG to power agreement be deployed for the first 3 trains at Corpus or more for Stage 3? If so -- and how much aggregate capacity upside you have on debottlenecking, heading in 2020 to 2021? Because you said most of those efforts aren't going to be hitting next year. It's just that you have low maintenance?

Jack Fusco -- President and Chief Executive Officer

OK. So there's three -- there were three questions in the one, right, Craig? So the first one, I'll take, which was with the accelerated schedule for Train 3 and our performance, which as we all know, it's really our Train 8, and we should be getting better and better as we get more and more of these behind us. Do the contract start-up or have the right to start-up early? The answer to that is no. Those early cargoes will be treated the same way we've treated them in the past, which would be marketed by our CMI affiliate.

The second part of that was Chilean, etc., all those other contracts for Stage 3, and I'll turn that one over to Anatol.

Anatol Feygin -- Executive Vice President and Chief Commercial Officer

Thanks, Jack. Just to follow-on Jack's answer. Nothing steps up as a function of the trains coming on earlier. But as you know, there are bridging volume components to some of the transactions, and those do ramp until we get to the ratable volume stage in the contract, it's just not train-dependent.

In terms of your question on Chile, we're finalizing that agreement. It's relatively modest in size. It'll be something that is at CMI. It's on a delivered basis, as you know, and we'll contribute to supporting our investment portfolio and that has flexibility for us to do it, in essence as we lease, with the contract being at CMI, but it's very, very modest in size.

Jack Fusco -- President and Chief Executive Officer

And for all of those additional contracts, whether they're the two IPMs, which is Apache and EOG, or the CPC contract in Taiwan. We're trying to put a portfolio of contracts together that support the extension of our facilities in that next expansion of Stage 3. And then I think there was 1 more question you had, Craig, in that long list.

Craig Shere -- Tuohy Brothers -- Analyst

Yes, the guidance was that you were looking good in 2020 on capacity because it's a low maintenance year, but that you're actually also working on active debottlenecking efforts that weren't really going to hit mostly next year. So I was just asking about the trend of capacity uplift from debottlenecking, from 2020 to 2021?

Michael Wortley -- Executive Vice President and Chief Financial Officer

Yes, don't know yet. I mean, we've raised our production range per train three times, and hopefully, we can continue to do that over time. But for now, we're at four-seven to five.

Craig Shere -- Tuohy Brothers -- Analyst

OK. So perhaps with a little more year-over-year turnarounds or maintenance that might offset the debottlenecking. So we just assumed that 2021 is about the same per train as 2020?

Jack Fusco -- President and Chief Executive Officer

That's fine for now. Yes, we'll see. 2022's a ways away, but I think it's fine for now.

Michael Wortley -- Executive Vice President and Chief Financial Officer

You also have another train starting up in 2021, which is Train 3 at Corpus.

Craig Shere -- Tuohy Brothers -- Analyst

Right, right. But on a per train basis, just for now, will keep at status?

Jack Fusco -- President and Chief Executive Officer

Yes.

Craig Shere -- Tuohy Brothers -- Analyst

OK. Thank you.

Operator

We'll move next to Spiro Dounis at Credit Suisse.

Spiro Dounis -- Credit Suisse -- Analyst

Hi. Good morning, everyone. Maybe just starting off on Stage 3. Could you just remind us again, are you thinking about the size of that FID? I believe at one point, you kind of left the door open, so maybe a partial FID.

So just wondering an update on maybe your current thinking around that? And if you could, maybe tie it to Anatol's confidence here, and maybe what that next set of contracts looks like as we go forward.

Michael Wortley -- Executive Vice President and Chief Financial Officer

Yes. Thanks, Spiro. It's Michael. I think we're still open to the possibility of different kinds of FIDs for that project.

It's a seven-train project of mid-scale, it could probably be five. And as we look through the numbers that ultimately in the market, we'll just take that, as you mentioned, so I'll turn it over to Anatol.

Anatol Feygin -- Executive Vice President and Chief Commercial Officer

Yes, thanks there, Michael. Yes. So as you guys know, and Jack mentioned between EOG, Apache and some of the things we have in the portfolio. Each one of these trains is ballpark 1.5 million tonnes.

So there's no reason to even discuss a three-train solution, but it's possible, as Michael said, that it's five at seven.

Spiro Dounis -- Credit Suisse -- Analyst

OK. Fair enough. Appreciate that. And then second one, you talked about it a little bit, but just maybe getting more specific around Europe and the storage situation there.

What do you all think sort of resolves that issue going into next year? Is it pretty much close to capacity as we could sort of go through the seasonality? I know Anatol, you mentioned some tailwinds, but then is that kind of enough to help that market absorb another year of U.S. imports? And what does that ultimately mean for the ARB in '20?

Jack Fusco -- President and Chief Executive Officer

Yes, a great question, it's a fair point, right? We don't reset to 0 and have Europe able to grow from this stage by another 20 million tonnes-plus. That's a very fair point. One of the things that has played out is fewer -- lower volumes on pipes as a function of North African and European supply. Norway's been down pretty significantly.

And so we need a -- winter cleans us up faster. We have had very robust demand growth on the power gen side, so that is something that is not dependent on seasonality, and this back half of 2019 weighted as everything was put in place and as Europe continues to grow this demand function. So all those help. Again, 2020 will be a very big supply year, right? There's no question, a big supply year on a run rate basis.

And of course, you get the full year effect of the 40 million tonnes coming on in 2019. So we're not -- as you can tell, we're not that optimistic on 2020. Hence, as Michael said, we've got more or less everything we can -- have to put away, put away. My point is that beyond 2020, there really is no meaningful supply.

It's literally a couple of trains for a number of years with most of those being our trains. So fairly confident that 2020 is the transition year and '21 through '23 look much better.

Spiro Dounis -- Credit Suisse -- Analyst

Understood. Appreciate the color. Thanks, gentlemen.

Operator

And we'll hear next from Shneur Gershuni at UBS.

Shneur Gershuni -- UBS -- Analyst

Hi, good afternoon, everyone. Just wanted to touch on a couple of quick questions here. It seems most of my questions have been asked and answered. I was wondering if you can talk about the path to investment-grade at the LNG level.

I noticed you've had a lot of positive rating actions at the subs, is it -- 2020 a reasonable timeframe to think toward the end of 2020 that you can see, i.g., across the board, or is 2021 a more realistic target?

Jack Fusco -- President and Chief Executive Officer

Thank you. Michael? To you.

Michael Wortley -- Executive Vice President and Chief Financial Officer

Yes. No, it's not going to be next year. I mean, look, we've said it's a multi-year progression. It's going to take us a while to get down to this high horse number that we're targeting.

I think the agencies are going to give us credit for getting there before we get there, but I guess -- that's not next year. And the two-pronged deleveraging strategy, doing Stage 3 at 50% debt equity is highly deleveraging for us, so we got to get that done. And then the balance is just straight debt paydown, which will happen as the money comes in. And so I mean -- and so it's not next year, and we'll see if it's the following year or even the year after that, but that's best we know right now.

Shneur Gershuni -- UBS -- Analyst

OK, that makes total sense. And one other question, appreciate the fact that you've presold your -- the marketing for next year, and you're effectively at 95% sold out and trying to upgrade the quality of the earnings from an investor perspective. Just wondering if that's going to be the strategy going forward that, when we have this call next year, you'll be in a 95% sold out position, and we can sort of think of it as a more ratable business than it's historically in treatment?

Jack Fusco -- President and Chief Executive Officer

Absolutely. You should expect us to manage the business appropriately and not take a lot of commodity risk if we don't have to. So I'm not giving -- I won't say that 95% is our target, but you should expect us to be prudent and disciplined.

Shneur Gershuni -- UBS -- Analyst

Perfect. Really appreciate the color, guys. Have a great weekend.

Operator

We'll move next to Evercore and Jon Chappell.

Jon Chappell -- Evercore ISI -- Analyst

Thank you. Good morning, guys. Michael, one of the key tidbits you gave on the last conference call was the cadence around the buyback up until that point. There was only $3 million in the six-30 financials, but you had said that you'd bought up to $100 million at that point in August.

Is there any clarity you can give on what you've done since the end of the third quarter? I know we're early on November 1st, but the first 31 days?

Michael Wortley -- Executive Vice President and Chief Financial Officer

Yes. I think we're going to get out of the habit of giving those updates and just wait for the Q to come out. We were -- kind of our first report after starting the program, and so we made an exception last time. I think from here on out, we'll rely on the Q.

Jon Chappell -- Evercore ISI -- Analyst

OK. That makes sense. And then, just a follow-up to one a couple ago, maybe to Anatol. On the -- how are you thinking about CC 3? It sounds -- I mean, Jack's confident as ever for EPC, it sounds like we may even have an update on that by the time we speak to you next.

Is there a percentage threshold on SPA that you're thinking about before you actually trigger FID? And also kind of a part B to that, do you view IPMs as exactly similar to an SPA? Or are they not quite kind of like this long-term contracts, in your view?

Michael Wortley -- Executive Vice President and Chief Financial Officer

Hey, it's Michael. Yes, I mean, on the second question, I mean, for us, they're very similar. I think the account is underwriting and investment. And then the first question was how much do we need to be sold, we never have really targeted a number.

We're trying to underwrite our economics on a contracted basis, kind of underwrite our downside case, and so that's always how we've looked at it. But having said that, it will be similar to our previous projects of 2/3 to 85% contracted, just depending on the economics.

Anatol Feygin -- Executive Vice President and Chief Commercial Officer

We could sell one molecule for a couple of billion dollars, we'd be done.

Jon Chappell -- Evercore ISI -- Analyst

I'm sure you're all that, Anatol. Michael, just to be clear, though, you said you view them kind of similarly, the discussions you've had with banks as far as underwriting the projects to, I assume, they view them exactly similarly as well?

Michael Wortley -- Executive Vice President and Chief Financial Officer

I think for us, yes. Yes. I mean, I -- I'm not sure that's the case. If we were six or seven years ago, but for now, and I just think where we are.

Yes, that is the case.

Jon Chappell -- Evercore ISI -- Analyst

OK. That's helpful. Thanks, Michael. Thanks, Anatol.

Operator

We'll take our last question today from Alex Kania at Wolfe Research.

Alex Kania -- Wolfe Research -- Analyst

Thanks. At risk of, I guess, getting ahead of myself here a little bit. Jack, you just mentioned expanding a little bit more upon kind of longer-term growth opportunities, presumably beyond Phase 3 at Corpus. I'm just wondering if that's kind of arising from just broader commercial discussions you're having with people right now in terms of this opportunity set is over the very long term.

Or is it just hey, we're pretty close to getting Phase 3 in the next, let's say, six and to nine months, and so we're kind of thinking about what's further on? OK. I'm just kind of curious how, how kind of -- how really you see that right now.

Jack Fusco -- President and Chief Executive Officer

Yes, and thank you. No, I think it's a combination of things. One is, we are very close to securing another close to 500 acres of property contiguous to our corporate -- Corpus site, so that will give us more land and berthing capacity because it happens to be waterfront, and that transaction should get done early next year, and that really opens up the possibility for quite a bit of additional expansion at Corpus. And the second part of that is the commercialization efforts.

As we've said, there's just a lot of interest in that site and its location to the Permian and trying to evacuate some of this associated gas that's going to be coming in greater and greater quantities from the Permian. And then also thirdly, with this infrastructure that we already have there, our additional expansion plans should be extremely competitive worldwide with any other options that utility customers have. So we're very, very focused on Corpus. We do feel like Stage 3 is going extremely well.

And we're looking for Stage 4 and beyond.

Alex Kania -- Wolfe Research -- Analyst

Great. Thanks very much.

Michael Wortley -- Executive Vice President and Chief Financial Officer

Thank you, Alex.

Jack Fusco -- President and Chief Executive Officer

And thanks all of you for your support of Cheniere.

Operator

[Operator signoff]

Duration: 67 minutes

Call participants:

Randy Bhatia -- Vice President of Investor Relations

Jack Fusco -- President and Chief Executive Officer

Anatol Feygin -- Executive Vice President and Chief Commercial Officer

Michael Wortley -- Executive Vice President and Chief Financial Officer

Jeremy Tonet -- J.P. Morgan -- Analyst

Christine Cho -- Barclays -- Analyst

Ben Nolan -- Stifel Financial Corp. -- Analyst

Julien Dumoulin-Smith -- Bank of America Merrill Lynch -- Analyst

Unknown speaker

Michael Lapides -- Goldman Sachs -- Analyst

Craig Shere -- Tuohy Brothers -- Analyst

Spiro Dounis -- Credit Suisse -- Analyst

Shneur Gershuni -- UBS -- Analyst

Jon Chappell -- Evercore ISI -- Analyst

Alex Kania -- Wolfe Research -- Analyst

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