Cheniere Energy, Inc. (LNG) Q1 2021 Earnings Call Transcript

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Cheniere Energy, Inc. (LNG -0.34%)
Q1 2021 Earnings Call
May 4, 2021, 11:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good day, and welcome to the Cheniere Energy, Inc. Q1, 2021 Earnings Call and Webcast. [Operator Instructions]

At this time, I would like to turn the conference over to Randy Bhatia, VP of IR. Please go ahead, sir.

Randy Bhatia -- Vice President of Investor Relations

Thank you, operator. Good morning, everyone, and welcome to Cheniere's First Quarter 2021 Earnings Conference Call. The slide presentation and access to the webcast for today's call are [email protected]. Joining me this morning are Jack Fusco, Cheniere's President and CEO. Anatol Feygin, Executive Vice President and Chief Commercial Officer; and Zach Davis, Senior 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 two of our presentation contains a discussion of those forward-looking statements and associated risks. 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 of the slide presentation. As part of our discussion of Cheniere'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 three. Jack will begin with operating and financial highlights, Anatol will then provide an update on the LNG market, and Zach will review our financial results and guidance. After our 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 A. Fusco -- President and Chief Executive Officer

Thank you, Randy, and good morning, everyone. Thanks for joining us today, and thank you for your continued support of Cheniere. I'm pleased to be here this morning to review our outstanding results from the first quarter. Before covering our results and outlook, I want to spend a minute addressing winter storm Uri and its impact on Cheniere. As we described back in February, we were impacted by the widespread power outages in Texas, which resulted in our Corpus Christi facility being down for a few days. I'm extremely proud of our operating personnel at both Sabine Pass and Corpus Christi for rising to yet another weather challenge and working so diligently to manage our operations smoothly throughout the freeze event. From hurricanes to fog to now historic freezes, the Cheniere platform has withstood whatever mother nature throws our way and our focus on safe and reliable operations continues to benefit our customers, shareholders and other stakeholders.

As a result of the winter storm, there was no material impact on our assets or operations, and we were able to fill some cargoes at Sabine Pass and restore Corpus Christi to normal operating levels quickly to mitigate impacts on our delivery obligations. We did recognize a financial benefit as a result of some optimization activity in the period leading up to the storm. But the magnitude of that benefit is not material, which to our expected full year 2021 financial results. More importantly, the global LNG market has recovered significantly for 2021 and beyond as demand has outstripped supply, resulting in higher prices even during the shoulder and summer months. I continue to believe in the long-term viability and sustainability of LNG as an essential fuel source in the low-carbon future. Please turn to slide five, where I will review some key operational and financial highlights from the first quarter, including our upwardly revised 2021 guidance. After delivering on our 2020 guidance, despite a myriad of challenges, we continued our momentum into the first quarter and are off to a fast start.

Now full year 2021 is looking even better for us than it did on our last call in February. For the first quarter, we generated approximately $1.5 billion of consolidated adjusted EBITDA, approximately $750 million of distributable cash flow and almost $400 million in net income on revenue of approximately $3.1 billion. We've often described 2021 as Cheniere's cash flow inflection point, and you can see progress on that early in the year in our first quarter financial results. Zach will cover these numbers in more detail in a few minutes. During the first quarter, we exported a quarterly record of 133 cargoes of LNG from our two facilities, with production incentivized by strong global LNG margins during the quarter, and we had the benefit of Corpus Christi Train three commissioning volumes. This record production is also despite Corpus being down a few days as a result of the winter storm in February. A sustained stronger LNG margin environment, together with our results for the first quarter, contribute to our ability to raise our full year 2021 financial guidance for the second consecutive quarter.

Our outlook for the balance of the year has improved since our last call in February, with a slightly higher production forecast, augmenting the impact of the improved LNG margins we see throughout the balance of the year. We now forecast consolidated adjusted EBITDA of $4.30 to $4.6 billion, and distributable cash flow of $1.60 to $1.9 billion for the full year 2021. Near the end of the quarter, Train three at Corpus Christi achieved substantial completion within budget and in line with the accelerated time line we've previously communicated, with the completion of train three, the Cheniere and Bechtel relationship has now delivered eight LNG trains ahead of schedule and within project budgets, which is truly world class execution. And that execution excellence continues with our ninth Train. As construction on Train six at Sabine Pass continues to progress against accelerated schedules. The estimated substantial completion timeline has accelerated once again. Substantial completion is now projected to be achieved in the first half of next year. As I hope you all saw this morning, we issued a press release announcing we supplied a carbon-neutral LNG cargo to Shell, whereby Cheniere and Shell jointly offset the full life cycle emissions of a cargo. The carbon offsets covered full life cycle emissions.

From the wellhead through consumption, with Cheniere delivering the cargo to Shell FOB at Sabine Pass and Shell delivering the cargo to a our European regasification facility. This first carbon neutral cargo is another step in Cheniere's environmental efforts I've discussed over the past several months. Our efforts emphasize enhanced transparency as a critical step toward improving environmental performance, and maximizing the benefits of our LNG for Cheniere, our customers and our value chain partners. Today's carbon neutral cargo announcement follows our February announcement of cargo Emissions Tags development. The response to our CE tax from current and prospective customers has been extremely positive and has spurred further engagement. Our focus is to ensure the long-term benefits of natural gas as an affordable, reliable and clean energy source for the world. Turn now to slide six. Where I'll discuss what I'm seeing in the market today and why I'm so optimistic about Cheniere's future prospects.

In the short term market, we're beginning to see the impact of the structural shift to natural gas as a primary energy source for the world, as evidenced by the global LNG demand growth we saw in 2020 despite the pandemic. There was constructive LNG demand tension between Europe and Asia earlier this year that left some countries short of natural gas. In addition, South America is entering its winter demand month and is contributing to the tightness in the global LNG market. With natural gas storage below normal levels in Europe and precious little new supply entering the market this year, we also have a constructive backdrop in the LNG market for the balance of this year and into next year in 2023. With Corpus Christi Train three completed very early and the completion time line for Sabine Pass Train six recently accelerated again to the first half of next year. We are ideally positioned to benefit from these near-term market dynamics. In the longer term, the supply and demand fundamentals in the global LNG market are even stronger and reinforce our confidence in the value of our existing platform and in our ability to commercialize our Corpus Christi Stage III expansion project.

In the four year period from 2017 to 2020 and the global LNG market added almost 120 million tons of capacity, an average of almost 30 million tons per year. In the subsequent four year period, that average is expected to drop to approximately 11 million tons a year, a significant slowdown in supply growth, which will be amplified by output declines from older legacy projects. On the demand side, the structural shift to gas on a global basis is evidenced by the near-term doubling of LNG importing nations in the last 10 years, and hundreds of billions of dollars of natural gas oriented infrastructure being built around the world today. LNG consumers recognize and value LNG's flexibility, reliability, affordability and the critical role natural gas plays in improving environmental performance and achieving decarbonization goals. We forecast that global LNG trade will approximately double, expanding by approximately 350 million tons per annum to over 700 million tonnes per annum by 2040, which would support additional, approximately 225 million tons per annum of incremental global supply. Our constructive long-term view on the LNG market was recently reinforced for the results of a comprehensive climate scenario analysis we conducted with a leading global management consulting firm. We published this analysis last month, and it's available on our website.

This study analyzed Cheniere's business over the long-term under various energy transition scenarios and concluded that even under the most aggressive energy transition scenario analyzed. Demand for LNG and natural gas is expected to grow for decades to come. In that not only are Cheniere's existing assets well positioned to take advantage of that, but new LNG capacity will be needed to meet that demand. With regard to Cheniere specifically, our accomplishments and progress over the past five years of LNG operations have been nothing short of transformative and position the company to take full advantage of the constructive market we see in front of us. We have established ourselves as a premier LNG operator, demonstrating LNG buyers worldwide the reliability and certainty associated with a long-term supply agreement with Cheniere. In addition, our continuous improvement efforts have yielded efficiency gains and debottlenecking has unlocked a significant amount of extremely cost-effective volume across our projects, which further improves our competitive position and increases financial returns.

As construction ramps down, the long-awaited financial results of our multiyear capital programs are bearing fruit as evidenced by today's results. This year, we expect to generate well over $1 billion of free cash flow, and we are quickly approaching our expected run rate metrics. Our run rate forecast of $11 per share and distributable cash flow not only has a high degree of visibility but also empowers us to execute on an all of the above strategy for capital allocation, which includes achieving investment-grade credit metrics, funding a significant portion of Corpus Christi Stage three with cash flow after that project is commercialized and returning significant capital to shareholders via buybacks and dividend. Zach and his team and I are working diligently with the Board and the rest of management on our detailed capital allocation plans, which we will communicate to you later this year. I'm excited about what we are seeing in the LNG market, how Cheniere is positioned to capitalize with our portfolio volumes, a shovel-ready brownfield expansion project commercial offerings tailored to customers' needs and an improving credit and cash flow profile.

With that, I'll turn the call over to Anatol, who will provide some more details on recent LNG market developments.

Anatol Feygin -- Executive Vice President and Chief Commercial Officer

Thanks, Jack, and good morning, everyone. Please turn to slide eight. The global LNG market exited 2020 on a positive note as cold weather across Asia and continued economic expansion in China helped contribute to an increase in Asian LNG imports in Q4. As non-U.S. supply was slow to respond, markets tightened as Asia pulled cargoes from Europe, a trend which continued in Q1 of 2021. The in the first quarter, global LNG supply showed positive year-on-year growth for the first time since the first quarter of 2020, but net growth was modest as a healthy 17% growth in U.S. exports was largely offset by declines at several LNG facilities around the globe, which were either shut down or underperforming, including facilities in Norway, Nigeria, Australia, Trindad, Tobago and Russia. Extreme cold weather in Asia and then Europe during the first quarter, combined with the supply constraints and a tight shipping market, caused unprecedented price spikes in JKM in the early part of the quarter to all-time highs of over $30 in January. Since then, extreme temperature conditions have passed and JKM prices have moderated.

However, price levels are still well above where they were a year ago with March JKM settling at $8.26 and June trading above $9 currently. Well above prices around the $2 in MMBtu level a year ago, indicating an underlying structural tightening of the market, supported by strengthening demand fundamentals. As I just mentioned, in Asia, LNG imports were very strong in Q1, up over seven million tons or 11% year-on-year. China added nearly five million tons of LNG demand despite robust domestic gas production and increased Russian pipeline gas imports. Early reports of total gas demand in China show an increase of approximately 15% year-on-year in Q1. Weather, continued coal-to-gas switching and a remarkable over 18% increase in Q1 GDP drove the demand increase. In the Japan, Korea, Taiwan area, LNG imports increased 8% or three million tons year-on-year due partly to scheduled nuclear and coal outages.

From a structural demand level, 10 years after the Fukushima earthquake, most Japanese nuclear plants remain offline with only nine units, totaling 9.1 gigawatts resuming operation as of Q1 '21 compared with 42 gigawatts in 2010, solidifying LNG as a critical fuel for the stability of the energy system in Japan and in the region as a whole. In Europe, gas demand in major markets rose by 9% year-on-year during Q1 and stronger heating and gas-fired power demand. Significant drawdowns from storage through winter and into April has left European storage approximately 34 bcm or around 50% lower than the prior year by the end of April and approximately 11 bcm or approximately 375 Bcf below the five year average. To attract LNG volumes away from Asia to help replenish storage, TTF prices remain elevated. April TTF settled higher than JKM at $6.46 an MMBtu that was 13% higher on the month and up almost 200% year-on-year.

Current prop margins are in the $3 range, inclusive of a dramatic upward shift in charter rates from the $30,000 a day range well above the $80,000 a day range today. Based on these demand fundamentals, although specific conditions during the first quarter led to some dramatic LNG price volatility, we believe we have also seen indications that the structural tightening that we've been predicting for some time is now under way. As such, we have continued to transact incremental volumes aligned with our midterm strategy. The team has secured an additional approximately 1.7 million tons, locking in over $200 million in fixed fees across 2022 and '23. We see strong appetite for midterm agreements as both intermediaries and end users add diversity, security and flexibility to their portfolios. Turning now to slide nine, where I will discuss some longer-term aspects of the market. We've discussed over the last few years that we viewed 2021 as a transition year to a tight market.

And as we just described, that has played out so much faster than we expected. Forward margins today during the Northern Hemisphere Spring shoulder season, are higher than they have been at any point for this season since we began operating just over five years ago. A number of market conditions that have been headwinds to entering into long-term commitments have more recently become tailwinds. And such as oil price, prompt margins and forward supply growth, just to name a few. We remain quite sanguine on the long-term contracting market for our products over the coming quarters and years as the demand for LNG will continue to increase over time with many current markets expanding and new markets continuing to be added. Specific to Asia, along with China and India, markets in South and Southeast Asia have shown keen interest in expanding their natural gas infrastructure. From pipelines to power plants to support their rapidly growing economies. In power generation, forecast suggests that gas is expected to be the second highest growth segment after renewables in terms of capacity additions.

The need to expand access to reliable energy across the region means that natural gas is expected to play a crucial role in ensuring sustainable economic growth while reducing emissions intensity. Of the roughly 3,000 gigawatts of forecast incremental power generation capacity in Asia by 2040, over 300 gigawatts is expected to be gas fired. Just for reference, a gigawatt of combined cycle natural gas generation operated as baseload, requires approximately one million tons of LNG per annum. A significant portion of that sum will be in China, but almost half of it is expected to satisfy growth in South and Southeast Asian countries, such as India, Indonesia, Bangladesh, Vietnam and the Philippines. Some of these countries are already well-established gas users with indigenous resources, which are mature and declining.

Data from Wood Mackenzie suggest that the region could lose more than 20 Bcf a day of domestic output by 2040, and while current upstream developments are considered unlikely to offset more than just a small fraction of that decline. In addition, gas demand in the region is currently expected to grow by at least 18 Bcf a day during the period to 2040, creating a gap of more than 35 Bcf a day of gas, which we expect to be satisfied in large part by LNG. Again, for reference, 35 Bcf a day is equivalent to approximately 250 million tons per annum of LNG. Please turn to slide 10. LNG demand growth across the various markets of South and Southeast Asia is in aggregate very significant. LNG demand growth in South and Southeast Asia is expected to accelerate and potentially grow fivefold by 2040, adding between 160 million and 200 million tons to global trade. We believe that over the next two decades, over 20% of the growth in Asian demand will come from China, and approximately 70% will come from South and Southeast Asia as these countries prioritize gas over coal to secure economic growth and meet their climate goals.

This region consumed over 17% of global coal and was responsible for more than 1/3 of global greenhouse gas emissions in 2019. While most net zero pledges came from outside the region, we believe that nations in South and Southeast Asia have been increasingly determined to improve environmental performance and find ways to fuel growth in a more environmentally sustainable manner. We see Cheniere's LNG as a secure, reliable and cost-effective fuel for the region and which, along with renewables, will displace more polluting fuels. Jack already touched on our leadership and initiatives in ESG and I'll just add that we are seeing increasing interest and engagement from both existing and potential customers on the environmental opportunities we are developing. Cheniere stands ready to work with customers in the region and all over the world to create practical solutions that fit their commercial needs and satisfy global environmental imperatives. We believe our low emitting LNG standards will play a role in supporting the region's environmental goals and its energy priorities. Thank you all for your time.

I'll now turn the call over to Zach, who will review our financial results and guidance.

Zach Davis -- Senior Vice President and Chief Financial Officer

Thanks, Anatol, and good morning, everyone. I'm pleased to be here today to review our first quarter financial results and key financial updates as well as our increased 2021 guidance. Turning to slide 12. For the first quarter, we generated net income of $393 million, consolidated adjusted EBITDA of approximately $1.5 billion and distributable cash flow of approximately $750 million. Our financial results for the first quarter were positively impacted by increased global LNG prices and margins, particularly margins realized on spot and short-term cargoes sold through our marketing affiliate and a higher-than-normal contribution from LNG and natural gas portfolio optimization activities due to significant volatility in LNG and natural gas markets during the quarter.

As we have discussed in prior quarters, our IPM agreements, certain gas supply agreements and certain forward sales of LNG qualify as derivatives and require mark-to-market accounting meaning that from period to period, we will experience noncash gains and losses as movements occur in the underlying forward commodity curves. The impact of shifts in these curves on the fair value of our commodity and FX derivatives, during first quarter 2021 was a net loss of approximately $120 million, which was substantially all noncash. For the first quarter, we recognized an income 456 TBtu of physical LNG, including 442 TBtu from our projects and 14 TBtu from third parties. 84% of these LNG volumes recognized in income were sold under long-term SPA or IPM agreements. During and after this winter storm, we were able to work with our long-term customers on cargo schedules as well as shift some volumes from Corpus to Sabine, leading to no material impact to our production for the quarter.

We received no cargo cancellation notices and had no revenue related to cargo cancellations in the first quarter. However, we previously recognized $38 million of revenues during fourth quarter 2020 and related to canceled cargoes that would have been lifted in the first quarter. Commission activities for Corpus Train three went well, as Jack discussed, and we received $191 million related to sales of commissioning cargoes in the first quarter, corresponding to 25 TBtu of LNG. As a reminder, amounts received from the sale of commissioning cargoes are offset against LNG terminal, construction and process, net of the costs associated with production and delivery of those cargoes. six TBtu of LNG-related to commissioning activities was on the water at the end of the first quarter and will be recorded as an offset to construction in process upon delivery. Turning to the balance sheet. We prioritized debt reduction since raising the Cheniere loan to refinance convertible notes last year and have committed to pay down at least another $500 million of outstanding debt in 2021.

The we made good progress toward that goal during the first quarter when we paid down $148 million in outstanding borrowings under the Cheniere term loan. I'll provide some additional color in a few moments. But we are in an excellent position to reach, and likely surpass, our minimum debt reduction target this year. In February, we locked in an approximately $150 million private placement of long-term amortizing fixed rate notes at SBL that are committed to fund in late 2021. And at a rate of 2.95%, the lowest yielding bond ever secured across the Cheniere complex. In March, CQP opportunistically issued $1.5 billion of 4% senior notes through 2031, the proceeds of which, together with cash on hand, were used to extend the maturity and accretively refinance all of CQP's 5.25% senior notes due 2025. Our efforts on execution, performance and prudently managing the balance sheet throughout the Cheniere structure continue to be recognized by the credit rating agencies. As we mentioned on our last call, in February, Fitch revised the outlook of SPL's senior secured notes rating to positive from stable while reaffirming its existing BBB minus investment-grade rating.

In April, S&P revised the outlook of both Cheniere Engineered Partners BB ratings to positive from negative, a signal that ratings upgrades may be coming. In addition, S&P's commentary indicated a leverage level of 4.5 to five times on a debt-to-EBITDA basis in the next couple of years could be consistent with an investment-grade rating. Commentary, which is in line with, and supportive of, our deleveraging plan and goal of investment-grade credit metrics throughout the structure. Turning now to slide 13. As Jack mentioned, today, we are again increasing our guidance ranges for full year 2021 consolidated adjusted EBITDA and distributable cash flow by $200 million, bringing total increases to $400 million above the original ranges we provided in November of last year. Our revised guidance ranges are $4.30 to $4.6 billion in consolidated adjusted EBITDA and $1.6 to $1.9 billion in distributable cash flow. Today's increase in guidance is largely driven by our strong results in the first quarter. The continued improvement in global LNG market pricing and our ability to execute additional higher-margin forward sales into the stronger pricing.

Since the last call, we have continued to lock in additional volumes for the remainder of the year. Though those sales have been offset by an upwardly revised production forecast driven by maintenance optimization, some favorable weather and a much faster than expected ramp-up to steady Train three volumes. We currently forecast that a $1 change in market margin would impact EBITDA by approximately for full year 2021. As we have now sold almost all of our production for the remainder of the year and have completed and placed Corpus Spring III into service, in line with our previously forecasted timing. Our remaining exposure this year is not material, and we only plan to provide another update if that were to change. We are confident in our ability to deliver results within these upwardly revised guidance ranges for the full year. With Train three now in operation, we've also now passed the free cash flow inflection point we have long discussed with our stakeholders. We expect to generate meaningful free cash flow this year for the first time in Cheniere's history of well over $1 billion.

We originally committed to $500 million in debt reduction this year, but we now think $500 million is conservative due to our strong performance and cash flow generation year-to-date and the forward sales of LNG we have executed in a strong LNG market. We are continuing to work on our long-term capital allocation strategy with our Board, and we anticipate communicating this multiyear plan to you in the second half of the year. Including more comprehensive plans for the remainder of free cash flow this year after meeting our initial 2021 debt reduction goal of $500 million. That concludes our prepared remarks. Thank you for your time and your interest in Cheniere.

Operator, we are ready to open the line for questions.

Questions and Answers:

Operator

[Operator Instructions]. Our first question comes from Jeremy Tonet with JPMorgan.

Jeremy Tonet -- JPMorgan -- Analyst

Hi, good morning.

Jack A. Fusco -- President and Chief Executive Officer

Good morning, Jeremy.

Jeremy Tonet -- JPMorgan -- Analyst

Just want to start off with the kind of improving LNG market here and see what that could mean for Cheniere. It seems like you guys are able to kind of sign some more contracts here. So I'm wondering how much visibility do you have? Do you think the market is tightening where longer-term contracts might be at attractive rates that you would look to sign or even just looking at 2022, just how much spreads are you able to capture at this point kind of derisk your outlook for 2022?

Jack A. Fusco -- President and Chief Executive Officer

So Jeremy, this is Jack. I'll start, and then I'll turn it over to Anatol and then Zach, maybe. But we'll start off with -- first, like, I'm extremely pleased with my operating staff and their ability to debottleneck and optimize our maintenance program. So during the freeze at Corpus, we were actually able to do quite a bit of maintenance on the facility. So when we came back, we came back strong and we revised our production forecast, and we found significant number of additional cargoes that we can monetize this year. And that's my expectation with the staff and the team is continuing to work on operating efficiency and our effectiveness and drive our production appropriately with market conditions. Anatol, Jeremy's question was around the market for, I guess, mid and long-term contracting.

Anatol Feygin -- Executive Vice President and Chief Commercial Officer

Sure. Jeremy, things are, as we mentioned, turning around even faster than we had expected. Some of it is in a system from weather. Some of it is an assist from other facilities that are having operational issues and legacy production declines. We've talked at length over the last couple of years, quarters about the investment that's being made that Jack mentioned in his remarks, on the pipeline, regas facilities, additional countries that are investing hundreds and hundreds of billions of dollars in long-dated commitments to natural gas. And a lot of those places want to have security of supply. And one of the things, as Jack mentioned, we've displayed is that through thick and thin, through ups and downs, not only do we reliably perform on those commitments. Our product happens to have the lowest volatility, the most price stability of any of the other long-term contracting options. So we're entering into a very good period. We are right around the same level that we saw in 2018 in terms of forward margins for the next three, four years. That was, as you know, a very good period for us. That's not a necessary condition, but it's certainly very helpful.

And the difference between 2018 and now is that was a bit of a countercyclical rally in the market that was driven by a surprising strength in demand out of Asia, primarily China, and frankly, delays in terms of some infrastructure coming online, like some of the other U.S. projects. So the difference now, as Jack said, 30 million tons a year we're added 17 through '20. You look forward through the middle of this decade. There's not a lot of supply coming in, and we are very well positioned with these additional volumes that we're transacting in the short and midterm. As you may recall, bridging volumes were a key part of our commercial offering, and that's something that allows our our customers and load serving utilities to sleep at night with that reliability and production. So again, feel very good about the hand that we're playing and feel very good about securing additional margin. And now I'll hand it over to Zach to clean up.

Zach Davis -- Senior Vice President and Chief Financial Officer

Sure. Thanks, Anatol. Jeremy, today, we obviously aren't going to give you a look at our open capacity for 2022 yet. Really, we have to get through that budget process. We have the Annual Delivery Program, or ADP process. And by November, we'll give you our best outlook for 2022 and the open position and probably have even a better sense of when Trainsfixed is coming online. But you can expect we're already proactively thinking about it and executing on '22 and the attractive margins now in the curve over the next few years.

And with the success that CMIs has had on terming out physically, including through midterm deals, some of our debottleneck capacity. This has really helped lock in fixed fees this year for the next few years, actually. And post 2021, we've already secured over, let's say, over $500 million and in just in 2022, over $200 million. So you can say we've already been pretty proactive in locking up a portion of that open capacity for next year.

Jeremy Tonet -- JPMorgan -- Analyst

Got it. That's very helpful. Maybe just shifting to carbon here. I was just wondering if you could provide thoughts as far as this new transaction you did, the value chain carbon neutral LNG cargo to Shell. How do you see that market developing? How much appetite do you think that could be for that over time. And when it comes to carbon capture, do you think the current five Q provides sufficient economics for Cheniere to pursue CCS, given the dense Purity stream of CO2 that come off LNG facilities?

Jack A. Fusco -- President and Chief Executive Officer

Yes. Well, Jeremy, thanks. And as I'll add is I was very pleased to work with Shell, one of our largest foundation customers on that first carbon neutral cargo. And I think it's successful execution just ensures that Cheniere's capabilities ensures our capabilities to actually operate across the entire value chain. I think offering climate solutions to our customers is going to be a bigger and bigger portion of our business and right in line with what our value proposition is for the customer. As I've talked about before in the past, our first goal, though, is to monitor, validate and report on our carbon footprint.

And that's when we announced our our cargo emission tags or the CE tags. We're well on our way on that aspect of it. You mentioned CCS. CCS is important, our initial blush is that it looks very promising at our facilities. I think we're committed and have committed some real dollars to development and engineering resource. To flush out CCs and its potential capability to help us both at Sabine and at Corpus Christi. But I think our customers are going to expect us to continue to offer a sustainable LNG product. Anatol, do you have anything to add?

Anatol Feygin -- Executive Vice President and Chief Commercial Officer

Thanks, Jack. Just very quickly, as Jack said, transparency and our ability to offer that to our customers is very important. This is another arrow in our quiver, and it is part of the comprehensive offering that allows us to capture -- to continue to capture market share. So this is another box that we have checked in terms of our capabilities, and we're grateful to have a partner like Shell as we navigate this and continue to develop our ESG offerings.

Jeremy Tonet -- JPMorgan -- Analyst

Got it. Thank you very much for the thoughts.

Jack A. Fusco -- President and Chief Executive Officer

Thanks Jeremy.

Operator

Our next question comes from Shneur Gershuni with UBS.

Shneur Gershuni -- UBS -- Analyst

Hi, good morning everyone. I just kind of wanted to follow up on the first question that was asked. Just given the fact that you've been successful negotiating incremental contracts into '23 and kind of the volatility that we've seen and so forth and kind of the forecast that you laid out, how close are we to securing enough contracts to give the board comfort in sanctioning Stage III to an FID process? And would you do it all at once? Or would you do it kind of in a piecemeal type of approach?

Jack A. Fusco -- President and Chief Executive Officer

So just to be clear, we are 100% focused on making sure that stage three gets commercialized as soon as possible. But as I talked about on previous calls, I mean, we literally have a virtual train of LNG that we need to sell and secure, which is what our midterm product offering is helping us do. So through our debottlenecking efforts and maintenance optimization, there was at least seven million tons of LNG, additional LNG coming off the portfolio that we're blessed to have, quite honestly. So that's, first and foremost, is making sure that we secure the existing nine trains worth of LNG before we go off and build stage three, another 11 million tons. But I don't know, Anatol or Zach, do you have anything to add?

Anatol Feygin -- Executive Vice President and Chief Commercial Officer

Thanks for the question, Shneur. We're -- again, we're very optimistic, and this all contributes to our goals of of increasing the contractual coverage, and we will not waver on our investment commitments, which require roughly we talk about this 1.7 million tons, that's total tonnage over time. As Jack said, this is a $10-plus million ton project plus the volume we have in the portfolio. Per annum, right? So you're talking about kind of an order of magnitude, more commercialization that's required, but we feel very good about what we're seeing today and for the coming quarters.

Shneur Gershuni -- UBS -- Analyst

Great. No, I appreciate the color. And maybe for a follow-up. During the quarter, you prepaid $148 million on the term loan, you've been able to issue debt at 4% you've had positive outlook revisions from both S&P and Fitch. And you kind of touched on it on your prepared remarks, but I was wondering if you can expand on the guidance or soft targets around leverage levels to get the upgrade to BB+ and then to investment grade. Any expanded discussion on that would be super helpful.

Zach Davis -- Senior Vice President and Chief Financial Officer

No problem. This is Zach here. And I think the S&P note last month for the outlook upgrade at CEI and CQP, this really validates everything we've been communicating to you all for the last few years on capital allocation. And it's pretty consistent with how we step-by-step got our -- even our project ratings over time from high-yield to investment grade. That's the being in Corpus by every agency. And now looking ahead, there's a, I guess, a defined path of EBITDA growth plus debt paydown to get below six times consolidated leverage to get to BB+ in the next year or so. And then leverage down to sub five times to get to BBB in the next few years. So our path is pretty straightforward to get to IG with S&P as metrics improve and as we simply grow into our run rate and follow through with capital allocation and debt paydown of up to $4 billion, pretty much consistent with what we've told you. So that's the plan, and that's on a consolidated debt-to-EBITDA basis.

Shneur Gershuni -- UBS -- Analyst

Perfect. Thank you very much. Really appreciate the color. Take care, guys. Have a great day.

Anatol Feygin -- Executive Vice President and Chief Commercial Officer

Thanks.

Operator

Our next question comes from Christine Cho with Barclays.

Christine Cho -- Barclays -- Analyst

Good morning. When I look at your shareholder list, I think there's probably still some turnover needed in the stock. Maybe it's lack of dividends or debt levels that keeping some of the investors out of stock. But as you think about capital allocation, how are you thinking about bringing new investment? As you talk to investors who you like in the stock, but aren't currently, what do they want? And how is that going to be factored into the broader framework that you're going to come out with later in the year?

Jack A. Fusco -- President and Chief Executive Officer

Christine, it's good to hear from you. I'll start, and I'll turn it over to Zach. I am concerned about the lack of float that we've had in the stock lately. I mean, I think it's consistent with with some of the oil and gas industry overall, but I'd like to see the float get up a little bit more. I think larger investors, especially index funds, at least in my experience, like to be able to get into stock and then get out of the stock without having too much pain. And so we need to work on expanding our horizon and being more desirable for the investment community at large. And I think a big portion of that is what Zach has highlighted, is getting our credit metrics under control. We don't screen very well on a Bloomberg screen. And we need to rectify that. We think we -- we're at an inflection point where we're going to have an opportunity here to give our shareholders back their investment. And we need to be thoughtful about it, which is why we're spending a lot of time trying to make sure that we get this capital allocation program done right the first time.

Zach Davis -- Senior Vice President and Chief Financial Officer

And I'll just add to what Jack said, Christine. And I think it's pretty obvious if we can get to investment-grade in the next couple of years or even just get into the S&P 500 index, it'd be helpful to bring more and more new investors into the stock. And I think it's pretty safe to say we're on track for both of those with a bit more time. And it's probably time, that's the operative word for this company because every day that goes by, we'll be making progress on our leverage get closer and closer to our run rate cash flows. And $11 is just going to be too hard to ignore, especially as that goes with capital allocation and growth. The other thing I'd note -- Christine, I'll just add one thing to that is that it's more than fair to say that over time, we're interested in attracting more and more income investors to the stock as well. But we know our leverage goes hand-in-hand with that to ensure that any shareholder return really is just sustainable not just for a few years, but for decades. So I think the all-of-the-above type strategy to capital allocation like Jack mentioned in the prepared remarks, is exactly what we're going to try to bring to you all in the next year or so.

Christine Cho -- Barclays -- Analyst

Got it. That's helpful. And then maybe if I can move on to contracting. In the last several weeks, months, we've seen a number of long-term contracts signed in the market. And most of them have been with Chinese counterparties. So just curious with no U.S.-China trade deal, how should we think about interest from portfolio companies, especially with delays that are going on with other ongoing LNG projects that are in construction?

Anatol Feygin -- Executive Vice President and Chief Commercial Officer

Yes. Thanks, Christine. That's absolutely fair. It is a -- the market continues to contract for term. We've always been in the camp that long-term contracts are a key building block to this market as it continues to grow and develop. And as we talked with Shneur, it is a period -- we've gone through a period where oil indexation was more attractive to buyers than NYMEX. Now we're entering a period where we firmly believe the opposite will be true. We are quite optimistic on the Chinese market for gas and for LNG. We think this is a critical component of its economic and environmental objectives. 14th five year plan continues to to commit to that, President Xi has committed to limit and actually decrease the amount of coal generation in subsequent five year plans, which all bodes quite well for us. We're very proud of what we have done to date.

We have a great commercial engagement with our Chinese counterparties, the SOEs and the Tier two and Tier three players, and we fully expect to have more commercial success there. It is a very large and important market. As Jack has said in previous calls, it can double the size of Cheniere in and of itself. And and we continue to be quite engaged there. But I will tell you one of the reasons we highlighted on this call, non-China Asian markets is because there's there is a broad range of opportunities beyond China as well. So just like on capital allocation, it will be all of the above. And again, we're entering now what we see as a multiyear period where NYMEX based contracting, long-term contracting will be very attractive.

Christine Cho -- Barclays -- Analyst

Got it. Thank you.

Operator

Our next question comes from Michael Lapides with Goldman Sachs.

Michael Lapides -- Goldman Sachs -- Analyst

Hi, guys. Thank you for taking my question and congrats for a good start to the year. Can you talk a little bit about Sabine six, just like when you talk about bringing it up into the first half of '22, are you talking just a couple of months ahead of what you were originally planning? Or is it conceivable you could get it very early in the course of next year online?

Jack A. Fusco -- President and Chief Executive Officer

Michael, it's Jack. And thanks for the kind words. Sabine Pass, which is what you would expect, Train six is actually our train number nine with Bechtel. And and I'd like to say, we have figured out how to stick build these trains faster and better than probably anywhere else in the world. And it is way ahead of accelerated schedule probably close to a year ahead. So I would expect that barring decent weather because we are about ready to head into the hurricane season again, which seems almost never-ending anymore. But baring decent weather that we'll be producing LNG and commissioning on that train before the end of the year.

And so we're hopeful that we can exceed the first half of the year guidance that we've given. And by November, when we talk about 2022 guidance, we might be able to be more specific than just the first half of the year. But it's tracking in the right way right now. And in terms of cost, there's $600 million to $700 million remaining of unlevered costs there before contingency, and a large majority of that is this year. So things are really ramping up there.

Michael Lapides -- Goldman Sachs -- Analyst

Got it. Super helpful. And then just trying to think about stage three at Corpus. Is there a material benefit in your kind of your cost to construct to be able to take that FID before -- basically before the major construction work that you've done over the last five plus sevenplus years with Bechtel kind of winds down. Meaning if Bechtel leaves the site, does that make a material change in your sites plural does that make a material change to what stage three would cost? Or put another way, if you had a two or three year pause before FID in stage three, does that kind of change the outlook for the economics of it and the cost of it?

Jack A. Fusco -- President and Chief Executive Officer

Not necessarily, Michael. For me, it's more about the team. We got a great team at Cheniere, Bechtel has a great team supporting us right now. If there's that much of a delay I'm sure those folks will get assigned elsewhere around the world. They're an international EPC contractor, and they're not going to keep their people waiting. So for me, it's more about the team and less about mobilization and demobilization costs because those are, quite frankly, kind of immaterial to the total investment. And, I would just add that we're partnering with Bechtel as we speak, actively looking at ways to make it cheaper and cheaper and more cost competitive. So they'll be around.

Michael Lapides -- Goldman Sachs -- Analyst

Okay. And then last one, just real quick. You mentioned kind of doing short-term contracts, one or two year $200 million of incremental revenue, roughly 1.7 million tons. Just real back of the envelope that's a little over $2 in MMBtu. I would assume that all kind of drops to the bottom line or almost all drops to the bottom line?

Jack A. Fusco -- President and Chief Executive Officer

Absolutely. That's the beauty of some of these midterm deals. It just gives us even more clarity on how much cash is available for the company to support capital allocation efforts as we give you guys an update later this year.

Michael Lapides -- Goldman Sachs -- Analyst

Got it. Thank you, guys. Much appreciate it.

Jack A. Fusco -- President and Chief Executive Officer

Thanks, Michael.

Operator

Our next question comes from Jean Ann Salisbury with Bernstein.

Jean Ann Salisbury -- Bernstein -- Analyst

Hi, good morning. Qatar has taken some steps the last few months to move forward with their mega expansion. A lot of investors that I talked to, that's their biggest worry is that Qatar could price low enough to keep any other new projects from moving forward. You're obviously in the market. So I just wanted to hear your comment on if this price pressure is a real thing that you're seeing.

Anatol Feygin -- Executive Vice President and Chief Commercial Officer

Thanks, Ann. It's Anatol. Every supply stack that we've ever put together has our friends at QP on the far left. And there's no question that, that thing gets dispatched and gets built, but it's 32 million tons, right? And as we've mentioned and Jack just mentioned, this market, when it was a smaller market, grew at 30-plus million tons per year. So if you -- as we look at that supply curve, and we've talked about this over the last 1.5 years, there were a lot of things in that that we thought even a year ago were a foregone conclusion that now may not even materialize this year. The QP North field expansion, of course, has been FID'd, and we're always fully expecting that it will get placed into the market. It will be done on an oil index basis, most likely. And it's one of our two main competitors that we see kind of as a foregone conclusion being in the market. So we're not afraid of that. We're part of the sort of diversification of supply and contracting structure along with QP and our friends at NovaTek.

Jack A. Fusco -- President and Chief Executive Officer

And Jean, I would say that Zach mentioned, we're working very closely with Bechtel to ensure that our expansion at Corpus Christi is the most competitive economic Henry Hub indexed expansion in the U.S.

Jean Ann Salisbury -- Bernstein -- Analyst

Great. And then just as a follow-up, if you can disclose this, and I apologize if it was in the early somewhere, but how much on a per MMBtu basis, did the carbon neutral offset ad for the Shell cargo?

Anatol Feygin -- Executive Vice President and Chief Commercial Officer

Thanks, Ann. This is Anatol. We are not disclosing that. Again, we partnered with Shell on that and has the lead in using its methodology as we continue to develop our LCA and get that completely buttoned up, pure reviewed, etc. But those commercial terms and economics, we are not disclosing.

Jean Ann Salisbury -- Bernstein -- Analyst

Okay. No problem. That's all for me. Thank you.

Jack A. Fusco -- President and Chief Executive Officer

Thank you.

Operator

Our next question comes from Michael Blum with Wells Fargo.

Michael Blum -- Wells Fargo -- Analyst

Thanks. Good morning everyone. I just had a really a clarification question on the midterm contracts you've been signing. Are you purposely signing these shorter-term contracts for your open capacity? Or is that just what the market is willing to bear right now? And given the improving market fundamentals that you described earlier, do you see that changing at all?

Jack A. Fusco -- President and Chief Executive Officer

Michael, midterm contracts have been around in this market forever. So we're not the first and only LNG provider to offer midterm contracts. But but it's a great way for us to meet with some of -- increase our customer base and meet what their objectives are, which -- and quite honestly, compete with the Qataris or the Russians and -- or the French total and offering these shorter term, midterm contracts. So we found a pretty good appetite of customers. They are not traditionally, I would say, the customers, the utility customers that we see on the long-term side. But there's a good market for that, and that helps us manage some of these excess volumes from our production. Anatol?

Anatol Feygin -- Executive Vice President and Chief Commercial Officer

And Jack, you covered everything. It's just another product in our portfolio, one that we we're not offering in and of itself as recently as a year ago. We did do midterm contracts that were effectively stapled to long term, but it is something that that as Jack said, helps us engage and broadens our commercial offering. And again, fully expect that long-term contracting will resume in short order given the current margin environment and where we are in the cycle. Thank you very much.

Michael Blum -- Wells Fargo -- Analyst

Thank you very much.

Operator

Our next question comes from Julien Dumoulin-Smith with Bank of America. Our next question comes from Craig Shere with Tuohy Brothers.

Craig Shere -- Tuohy Brothers -- Analyst

Thanks for squeezing me in and congratulations on the good quarter. Jack, did I hear you say Corpus Christi Stage three could be an 11 MTPA project? And then a related question, any updates on further upsizing opportunities for the legacy nine train position?

Jack A. Fusco -- President and Chief Executive Officer

Absolutely, Corpus Christi Stage three could be 11 million-ton project. And that's currently as we continue to work on value engineering with Bechtel. We continue to drive not only the production of those trains, but also drive the cost down. Greg. And then I'm sorry, I missed the last half.

Anatol Feygin -- Executive Vice President and Chief Commercial Officer

The rest was on debottlenecking, further debottlenecking on the nine trains.

Jack A. Fusco -- President and Chief Executive Officer

Yes. So we've -- the debottlenecking effort has went well above, at least my expectations the team has just done a great job at, I'd say, picking the low-hanging fruit, but they -- and they continue to identify different choke points within the LNG liquefaction process that we can make modifications to continue to drive more output through it. So I do think there's more to come. We'll be giving you some guidance on that as we identify and feel comfortable that we can deliver it over the long term.

Craig Shere -- Tuohy Brothers -- Analyst

Thank you.

Operator

Our next question comes from Chris Sung with Weber Research.

Chris Sung -- Weber Research -- Analyst

Hi, good morning gentlemen. Thanks for squeezing me in. I wanted to just kind of touch on the color you talking about for the supply curve. Are you able to kind of provide any thoughts on the Mozambique LNG deferral with the projected debt size on 13 and a being deferred biles or have you noticed any impact due to market? And has -- is there an impact for Phase III with that capacity?

Jack A. Fusco -- President and Chief Executive Officer

No. Look, I only know about the Mozambique delay with what I read as well as what you read that from Total and Exxon. And it's a sad situation, and I hope everybody is safe and healthy that were there to experience at unrest. But no, I don't think it's -- I don't -- again, it's a different business paradigm than what we offer. So we offer a full value product. The customer doesn't have to invest in equity. Customer doesn't have to worry about the E&P side of the business because we've been able to buy at our peak, almost seven Bs a day U.S. nat gas from almost 100 different producers on 26 different pipelines and deliver it to our two facilities. So we take care of a lot of what the customer needs unlike them having to invest equity or be intimately involved in the E&P side of the business. But Anatol, do you have anything to add on Mozambique?

Anatol Feygin -- Executive Vice President and Chief Commercial Officer

No.

Chris Sung -- Weber Research -- Analyst

Right. No, that's kind of the point. It seems like the project is kind of challenged, and you guys are able to kind of offer a product without equity and you're able to deliver this product. So could you guys possibly be able to absorb some of that offtake or have discussions with those customers that are impacted because this project is delayed, kind of go and what I would.

Jack A. Fusco -- President and Chief Executive Officer

Absolutely. And most customers are interested in the diversity of supply and having a reliable supply of LNG, and that's what we offer but absolutely, yes.

Chris Sung -- Weber Research -- Analyst

Yes. Okay. Okay. All right. And just one more on the -- I guess, the ESG front, you guys introduced the cargo and Mission Tags early in February, and it looks like you guys were able to deliver your first carbon mutual cargo to Shell. It looks like these are measures taken to kind of assuage the European businesses and customers with regards to the carbon intensity of the your product. So I guess, given -- I guess, how have those conversations change? Or have they kind of stayed consistent in the first half of this year?

Anatol Feygin -- Executive Vice President and Chief Commercial Officer

Thanks, Chris. This is Anatol. This is, again, continued progress by the team the work that we have done over the last couple of years made us very comfortable with our environmental footprint and emissions footprint. And we are working on, again, quantifying, validating and having that properly assessed before we roll it out, as you know, in '22, we are confident that we are part of the solution for decades to come. We just have to deliver on that transparency, and that is something that we're working on. Obviously, the engagement with Shell demonstrates steps in that direction as well. It is part and parcel of our commercial discussions and that we are -- we fully expect it to be an increasingly important component of those discussions. So again, dealt a very good hand that will continue to improve over time and contribute solutions as our customers move forward. Great. Congrats on a great quarter.

Chris Sung -- Weber Research -- Analyst

Great. Thanks so much and congrats on a great quarter.

Jack A. Fusco -- President and Chief Executive Officer

Thank you.

Operator

Our next question comes from Sean Morgan with Evercore.

Sean Morgan -- Evercore -- Analyst

Hi. This question is probably best for maybe Anatol. But last time I talked to Anatol, we were talking about the disruption, I guess, to customers posed by the super spike that we saw with JKM. I think that maybe causes a little bit of difficulty in terms of customer assurance of signing long-term deals. But have you -- because you saw Henry Hub really hanging with a lot less volatility, is there any kind of demand response that you're seeing now, the benefits Cheniere that maybe more customers looking to sign up Henry Hub based price volumes because of the kind of consistency of pricing there?

Anatol Feygin -- Executive Vice President and Chief Commercial Officer

Thanks, Sean. If I may redirect a little bit. What I think we're discussing is if we were in a world where natural gas prices, global natural gas prices spiked to such elevated levels, it could create long-term headwinds to natural gas' market share in the primary energy mix. What we've always said is that, that disruption that played out in the short-term spot market was a great advertisement, if you will, for long term contracting, right? Our our customers enjoyed almost perfect reliability and almost perfect price stability over that period. And what's being highlighted now as prices and margins have normalized, is that, again, the attractiveness of a $3 minus ish NYMEX product plus our economics on the long-term side are very stable and very attractive, and we think a key part of a diversified and and flexible portfolio. So if anything, just like some other price excursions that we've seen over the last couple of years, it continues to highlight the attractiveness of our term commercial offering. And we're very well positioned for these coming years. Sean, did I lose you?

Sean Morgan -- Evercore -- Analyst

Sorry about that. Yes. Just going back to Mozambique real quick. I noticed that...

Jack A. Fusco -- President and Chief Executive Officer

We're going to -- Sean we're over on our time. So I'm going to go -- and we still have people in the queue. So I'm going to ask that everyone left, just one question, please.

Sean Morgan -- Evercore -- Analyst

Sure. Thanks. Thanks, Jack.

Jack A. Fusco -- President and Chief Executive Officer

Thank you.

Operator

Our next question comes from Ben Nolan with Stifel.

Ben Nolan -- Stifel -- Analyst

Hi, thanks. Appreciate squeezing me in here, Jack. I wanted to -- and I apologize, this is overly simplistic. But just sort of looking at the quarter, you did $1.5 billion the EBITDA, but then sort of extrapolating the guidance for the remainder of the year, it's only about $1 billion a quarter, and that's even with not full contribution from Train three in the first quarter. Can, I don't know, Zach or anyone. Can you maybe walk through how you're thinking about what the moving parts are to that level of guidance relative to sort of the performance in the first quarter?

Zach Davis -- Senior Vice President and Chief Financial Officer

Sure. I think many folks smooth out our quarters over the course of the year and maybe that underestimated what many of you thought we would produce for Q1. But Q1, Q4, often the colder quarters of the year. They're not shoulder season. So there's less demand for LNG as well, and there's more volatility at the same time. All of that adds to higher EBITDA, higher figures for the beginning and the end of the year. So this was as expected to us. And we've made it pretty simple that for the rest of the year, there's only about 40 TPT even open. When those cargoes are delivered, that depends on some of the FOB versus deals that we have. But this is right on track for where we thought we would be for Q1 with some additional optimization of higher LNG margins. And then for the rest of the year.

Ben Nolan -- Stifel -- Analyst

All right. Okay. Thanks.

Operator

We'll take our next question from Alex Kania with Wolfe Research.

Alex Kania -- Wolfe Research -- Analyst

Great. Thanks for taking my question. Maybe just a follow-up on the Shell deal. Long term, as you just think about the European carbon market developing, we've seen higher prices there. And the potential for kind of import kind of tariffs, I guess, associated with carbon. Do you actually envision doing a carbon-neutral or carbon-free product kind of being value additive rather than just providing a good ARB rather than just getting a European buyer just pay more money for kind of for just kind of a generic premium? Or is it going to ultimately be a positive for you guys just on an ARR basis?

Jack A. Fusco -- President and Chief Executive Officer

Yes. Alex, I would say, first and foremost, in Brussels or in Europe is the U.S. gas market is the most transparent market in the world. So the first thing we need to do is get our LCA done, get it published, get it reviewed by all the scientists of how we're going to calculate the life cycle emissions of the whole LNG train because there's a lot of disinformation out there. And there is not a very good process for defining terms that everyone agrees to. So when we talk about transparency, about monitoring, validating and reporting our carbon footprint, that's in direct response to a lot of misinformation and miscalculation, to say the least.

And then secondly, I do think there's going to be a a premium to carbon offsets and our ability to generate and produce carbon offset to help our customers. And those offsets need to be with their appropriate registrar. They need to be validated. I think it's all in line with what our offerings are for our customer and part of our business line and business proposition. But and I -- yes, I think the first go around will be European or a European customer is initially, but I think worldwide the whole industry will move this way. Go ahead, Anatol.

Anatol Feygin -- Executive Vice President and Chief Commercial Officer

Yes. Just to follow-up on Jack's points. We have very good engagement across the world on these issues and metrics. Europe has the most liquid and most transparent carbon emissions market. As you pointed out, it's trading around $60 a ton today. That is a very good sign of the benefits that the natural gas and to the extent that we're comfortable with our LCA and our emissions footprint, Cheniere's LNG, the value that, that can contribute to that market. But but also good engagement, really all over Asia as the world continues to focus, and we continue to focus on improving our value chain and life cycle emissions profile that we're quite optimistic about. So kind of, again, just like capital allocation, all of the above.

Alex Kania -- Wolfe Research -- Analyst

Great. Thanks.

Operator

Our next question comes from James Carreker with U.S. Capital Advisors.

James Carreker -- U.S. Capital Advisors -- Analyst

Hi. Thanks for the question. Circling back to guidance. I was wondering if we could talk a little bit about what kind of change between now and the Q4 call. I think it was late February and the large spot price LNG spikes had kind of subsided. It was kind of post the storm. And I think you only had 50 TBtus of open capacity at that time. So kind of maybe can you talk a little bit about -- between now and then, what has changed to yield $200 million have additional upside?

Zach Davis -- Senior Vice President and Chief Financial Officer

Sure. This is Zach. And as you mentioned, we were able to raise guidance last time in February by $200 million. Our 200 TBtu of open capacity went down to 50 TBtu. And as the market went up, we were able to take advantage of that. Since that call, the rest of the year had been looking around $2. That's going up another dollar. And at the same time, our operations folks have been pretty opportunistic on the production. Just with the colder weather, Train three actually ramping up pretty smoothly after March 26 and then just some opportunistic maintenance during the freeze and fog. That they added around 10 more cargoes to the forecast. That's over 30 TBtu. So when you add those two things together, that gets to your $200 million pretty much.

James Carreker -- U.S. Capital Advisors -- Analyst

Okay. And is there any amount of that that you could quantify that's kind of gas optimization related to the storm?

Zach Davis -- Senior Vice President and Chief Financial Officer

Not really considering. I just gave you a number that's maybe three, four, if not more of a 200 move.

James Carreker -- U.S. Capital Advisors -- Analyst

Okay. All right. Thank you.

Operator

[Operator Closing Remarks]

Duration: 75 minutes

Call participants:

Randy Bhatia -- Vice President of Investor Relations

Jack A. Fusco -- President and Chief Executive Officer

Anatol Feygin -- Executive Vice President and Chief Commercial Officer

Zach Davis -- Senior Vice President and Chief Financial Officer

Jeremy Tonet -- JPMorgan -- Analyst

Shneur Gershuni -- UBS -- Analyst

Christine Cho -- Barclays -- Analyst

Michael Lapides -- Goldman Sachs -- Analyst

Jean Ann Salisbury -- Bernstein -- Analyst

Michael Blum -- Wells Fargo -- Analyst

Craig Shere -- Tuohy Brothers -- Analyst

Chris Sung -- Weber Research -- Analyst

Sean Morgan -- Evercore -- Analyst

Ben Nolan -- Stifel -- Analyst

Alex Kania -- Wolfe Research -- Analyst

James Carreker -- U.S. Capital Advisors -- Analyst

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