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Date

May 7, 2026, 11 a.m. ET

Call participants

• President and Chief Executive Officer — Jack Fusco
• Executive Vice President and Chief Commercial Officer — Anatol Feygin
• Executive Vice President and Chief Financial Officer — Zach Davis
• Vice President, Investor Relations and Communications — Randy Bhatia

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Takeaways

• Consolidated Adjusted EBITDA -- Over $2.3 billion for the quarter, driven by record LNG production and exports following substantial completion of Stage 3 Trains one through four.
• Distributable Cash Flow (DCF) -- Approximately $1.7 billion generated, reflecting increased production and improved operational reliability.
• Net Loss -- Approximately $3.5 billion, primarily due to unrealized non-cash derivative losses associated with long-term IPM agreements and accounting methodology differences between purchase and sale contracts.
• Adjusted Net Income -- Approximately $1 billion, after adjusting for non-cash derivatives, aligning with EBITDA and DCF as a clearer measure of operational performance.
• Share Repurchases -- Approximately 2.7 million shares repurchased for roughly $535 million in the quarter, as part of an opportunistic, $9 billion buyback authorization.
• Growth Capital Expenditures -- Approximate $1 billion deployed, with $300 million funded through equity and $700 million funded through debt, supporting Stage 3, Midscale 8 and 9, and project development at Sabine Pass and Corpus Christi.
• Dividend -- Declared at $0.555 per common share, with an annual target growth rate of approximately 10% through the decade.
• Debt Management -- Over $250 million repaid, including full redemption of SBL 2026 notes and partial amortization of SBL 2037 notes; $1 billion of 2036 notes and $750 million of 2056 notes issued, extending maturity to the second half of the century.
• Liquidity -- Approximately $1.8 billion in consolidated cash and significant undrawn revolver and term loan capacity reported.
• Revised Full-Year Guidance -- Consolidated adjusted EBITDA raised to $7.25-$7.75 billion and distributable cash flow to $4.75-$5.25 billion, with guidance midpoints up $500 million and $400 million, respectively.
• Volume Forecast -- Expected LNG production raised by approximately 1 million tons to 52-54 million tons for the year, reflecting improved debottlenecking and accelerated train commissioning.
• Production Records -- 187 LNG cargos exported through March, topping prior quarter's record, with expectations that first quarter represents the lowest production quarter of the year due to timing dynamics.
• Capacity Additions -- CCDL Stage 3 at 97% complete; Train 5 substantially completed, with Trains 6 and 7 ahead of schedule for substantial completion in summer and fall, respectively.
• Future Expansions -- Sabine Pass Train 7 and Corpus Christi Phase 1 moving toward FID; FERC scheduling notice recently received for Corpus Christi expansion, supporting the expectation of FERC approval next year.
• Market Dynamics -- LNG supply disruptions from the Strait of Hormuz closure and Qatar facility damage have removed about 7 million tons per month from the market, displacing roughly 8 million tons in the first quarter, and causing regional gas price repricing as prompt curves moved higher by $3-$4 per MMBtu.
• Contracting Outlook -- Less than 1 million tons of 2026 volumes remain unsold, with the company emphasizing its selective partner approach in a competitive market, and stating a "$1 change in market margins would impact EBITDA by less than $50 million" for the full year.
• Operational Improvements -- Enhanced utilization and reliability achieved by resolving feed gas composition issues and innovating daily operational strategies, enabling incremental production gains.
• Credit Ratings -- Moody's upgraded unsecured notes to BAA2 and BAA1 at CEI and CCH, both with stable outlooks, placing the company at high and mid triple B investment grade.

Summary

Cheniere Energy Partners (CQP +3.25%) presented a materially improved full-year financial outlook, raising guidance for both consolidated adjusted EBITDA and distributable cash flow due to increased LNG production forecasts and higher margins, underpinned by accelerated project execution and enhanced operational strategies. Management directly attributed improved performance to accelerated timelines for major growth projects, successful debottlenecking, and the locking in of incremental volumes for marketing. Capital deployment in the quarter reflected the company's integrated allocation strategy, with approximately $535 million in share buybacks, $1 billion in growth capex, and expanded long-term debt issuances extending maturities to 2056. Ongoing market disruptions from Middle East geopolitical events removed significant LNG supply from the market, amplifying the value of Cheniere's flexible contracting and secure supply positioning for global buyers.

• Fusco said, "Today, we're increasing our full year 2026 financial guidance to $7.25 to $7.75 billion of consolidated adjusted EBITDA and $4.75 to $5.25 billion of DCF," describing the previous high end of guidance as now the new low end.
• Feygin described, "normalization, approximately 7 million tons of LNG supply per month, or approximately 100 cargoes, continues to be disrupted," emphasizing persistent regional instability impacting global flows.
• Davis stated, "We are maintaining our CQP distribution guidance for the year of $3.10 to $3.40 per common unit," with increased production driven by technological and operational advancements.
• Optimization activities, including leveraging the company's integrated platform for upstream and downstream flexibility, contributed additional EBITDA, with guidance emphasizing "we don't bake in optimization that hasn't been locked in yet."
• The company observed, "less than 1 million tons or less than 50 TBtu of unsold open volumes remaining in 2026," significantly reducing earnings risk from market margins.
• Production ramping is anticipated with no major turnarounds planned for summer and expectations for the highest quarterly production in the final quarter, according to Davis.

Industry glossary

• EBITDA: Earnings before interest, taxes, depreciation, and amortization; a key performance metric in energy infrastructure.
• DCF: Distributable cash flow; cash available to return to unitholders after maintaining and growing the asset base.
• IPM Agreement: Integrated Production Marketing agreement; a long-term LNG contract structure with derivative accounting treatment.
• FERC: Federal Energy Regulatory Commission; U.S. regulatory agency approving energy infrastructure projects.
• LNTP: Limited Notice to Proceed; an early project approval step prior to full Final Investment Decision (FID).
• FID: Final Investment Decision; a project milestone representing commitment to move forward with capital construction.
• TTF: Title Transfer Facility; European natural gas pricing benchmark.
• JKM: Japan Korea Marker; Asian LNG spot price benchmark.
• MMBtu: One million British thermal units; a standard measure for energy content in natural gas.
• SBAs: Sales and Purchase Agreements; binding long-term LNG off-take contracts with counterparties.
• CMI: Cheniere Marketing International; the company’s LNG marketing and trading division.

Full Conference Call Transcript

Operator

Thank you for standing by. Good day and welcome to the First Quarter 2026 Cheniere Energy Earnings Call and Webcast. Today's conference is being recorded. At this time, I would like to turn the conference over to Randy Batia, Vice President of Investor Relations and Communications. Please go ahead.

Randy Bhatia

Thank you, Operator. Good morning, everyone, and welcome to Cheniere's first quarter 2026 Earnings Conference Call. The slide presentation and access to the webcast for today's call are available at chenier.com. 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 risks. In addition, a reconciliation of non-GAAP measures to the most comparable GAAP measure can be found in the presentation appendix. The call agenda is shown on slide three. After prepared remarks from Jack, Anatole, and Zach, 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

Thank you, Randy, and good morning, everyone. Thanks for joining us today as we review our results from the first quarter of 2026 and our improved outlook for the full year. Certainly, a lot has changed since our last earnings call, which took place just before the start of the war in Iran. What has unfolded in the wake of that operation is another major shock in the global energy system. The second such shock in just over four years. The closure of the Strait of Hormuz and the weaponization of energy, including the damage to a portion of QatarEnergy's LNG facility at Ras Laffan are tragic consequences, the effects of which are being felt all over the world.

The sudden cessation of reliable supply of Middle Eastern oil, natural gas, and the many other products that normally transit the strait every day on their way to dependent markets around the globe shine a bright light on the criticality of supply security and a diversified portfolio. What we sell at Cheniere is access to a secure, reliable and affordable product that provides the energy to power homes, businesses and economies. Prior to the war, the LNG market already demanded more production than the market could supply was evidenced by the elevated spot market margin we had in the first two months of the year.

The disruption of Middle Eastern volumes only exacerbates that supply shortage, increasing prices and restricting availability of supply to the wealthiest buyers at the expense of fast-growing, energy-hungry emerging markets. At Cheniere, we look forward to the resolution of this conflict that will enable the renormalization of commerce to one of the world's most important trade gateways, so that prosperity through energy affordability and availability can benefit all.

Please turn to slide five where I'll highlight our key results and accomplishments for the first quarter of 2026 and introduce our upwardly revised guidance for the year. Our performance in the first quarter has gotten off to an excellent start to 2026. We generated consolidated adjusted EBITDA of over $2.3 billion and distributable cash flow of approximately $1.7 billion.

On the production side, we picked up what we left off at the end of 2025 and produced and exported a record amount of LNG in the first quarter. The 187 cargos we exported through March topped the previous record set in the fourth quarter of last year. I'm extremely proud of our operations team, whose tireless efforts to engineer and deploy solutions to address the feed gas composition-related challenges we experienced last year continue to bear fruit and drove enhanced operational reliability during the quarter.

Today, we're increasing our full year 2026 financial guidance to $7.25 to $7.75 billion of consolidated adjusted EBITDA and $4.75 to $5.25 billion of DCF. significantly improved outlook. The previous high end of the EBITDA guidance is a new low end. It's driven primarily by an improvement in our production forecast of approximately 1 million tons, higher marketing margins, as well as higher contributions from optimization activities achieved year-to-date, both upstream and downstream of our facilities.

Zach will cover guidance in more detail in a few minutes, but we look forward to delivering financial results within these upwardly revised ranges for the year. During the first quarter, we continued to execute on our comprehensive capital allocation plan. We repurchased approximately 2.7 million shares for approximately $535 million, funded approximately $1 billion worth of growth CapEx with equity and debt. We paid down over $0.25 billion in debt, and we declared a dividend of $0.555.

Moving to our growth projects, we continue to make excellent and safe progress on our growth and expansion during the first quarter. Our CCDL stage 3 project now stands at approximately 97% complete. Substantial completion was achieved on train five in March and Trains 6 and 7 remain on track for substantial completion in the summer and fall, respectively, with each now tracking a few weeks ahead of schedule that had informed our initial 2026 production forecast in October of last year.

First LNG at Train 6 is expected within a few days. On our mid-scale Frames 8, 9, and D bottlenecking project, we have safely progressed to approximately 37% complete, and while it's still early, are tracking ahead of schedule on a number of execution fronts. Piling is nearly complete with approximately 8,000 piles having been driven. The first structural still has been erected, and the next major construction milestone is the first above-ground piping, which is scheduled to be installed this month.

With regard to our future growth, our line of sight on the Phase 1 expansions at both Sabine Pass and Corpus Christi continues to improve. As we disclosed in our last earnings call, we are budgeting for limited notices to proceed this year on the first phase of the Sabine Pass expansion, Train 7. We are working closely with Bechtel to finalize the EPC contract and would expect to begin issuing LNTPs shortly thereafter, which should be seen by the market as a clear signal that we are on track to reach FID.

At Corpus Christi, we're making excellent progress in our development of the CCL expansion project. We were pleased to receive our scheduling notice from FERC last week, supporting our expectation of FERC approval on that project in the first half of next year. We are extremely excited about these phase one projects, which we believe represent the most compelling risk-adjusted infrastructure investment opportunities on the Gulf Coast, or maybe all of North America, and are expected to credibly grow the Cheniere production platform by approximately 10% each.

Turn now to slide six, where I'll discuss my key strategic priorities for 2026. My priorities for 2026 are simple, execution, growth, and capital allocation. And I'll drill down briefly into each. First, on execution. My priority is to maintain our track record of delivering top-tier safety metrics while furthering our operational excellence program and being a trusted and reliable supplier to our customers. In dealing with some operational challenges last year, the team has responded with determination and resolve, and its efforts are paying significant dividends. The team has increased the utilization across both sites by identifying root causes and innovating solutions to address the issues impacting reliability, not just the symptoms.

In addition, the team has increased production through identifying and executing on deep bottlenecking opportunities while seamlessly executing on our planned maintenance activities. And we are focused on managing our platform in a market with elevated volatility. Despite the volatility, our coordinated teams across the globe have done an excellent job in our positions and assets, ensuring we deliver on our obligations to our customers while optimizing the portfolio through volatile domestic gas markets like we saw during the winter storm fern as well as very volatile international gas and shipping markets that have prevailed since early March.

Next on growth, with trains one through five of stage three substantially complete our immediate priority is a safe completion of train six and seven. As I just mentioned These trains have accelerated since last year, benefiting from lessons learned on the first trains, as our partnership with Bechtel has not only resulted in early operations of the trains, but also shorter timelines on both commissioning and ramp-up to full production. I expect those learnings to continue in order to benefit mid-scale trains 8 and 9, as those trains move deeper into construction later this year.

On our SPL expansion and CCL expansion, we are aggressively executing project development work streams across regulatory, financing, commercial, and EPC contracting as FIDs on those projects come into focus. Last week, we received our scheduling notice from FERC on the CCL expansion project, a critical step in the FERC process, and it is aligned with our expected timeline a FERC approval in the first half of 2027.

And finally on capital allocation, we had a major update on the last call with the achievement of the original 2020 vision plan, the new $9 billion authorization the board approved during the quarter for share buyback, and our new share count and run rate DCF targets. We're in an enviable capital allocation position enabled by our incredible long-term contract portfolio that provides decades of cash flow visibility, our brownfield growth opportunities, investment grade balance sheet, and opportunistic repurchase plan. In February, we celebrated the 10th anniversary of our first cargo, and next week will mark my 10th anniversary at Cheniere. I'm extremely proud of the many incredible milestones we've accomplished together in that time.

While these anniversaries offer the opportunity to look back, I prefer to look forward. And what we have in front of us are incredible opportunities. An opportunity to creatively grow Cheniere in the near term and secure the next phase of growth beyond that. An opportunity to grow our platform by another 20%, benefit engineer stakeholders while providing the world with more of the secure and reliable energy it needs to improve lives, grow businesses, and help emerging markets emerge. I'm incredibly excited about these opportunities, and we are laser-focused on turning them into achievements in the coming years.

With that, I'll now hand it over to Anatol to discuss the LNG market. Thank you again for your continued support of Cheniere.

Anatol Feygin

Thanks, Jack, and good morning, everyone. Please turn to slide 8. The past quarter has been defined by geopolitical disruption, most notably the escalation in the Middle East and the resulting closure of the Strait of Hormuz, which has put significant strain on global energy markets, including, of course, LNG. While the situation remains fluid, our commercial focus is twofold.

First, supporting our customers through near-term volatility, and second, understanding what these disruptions mean for longer-term LNG market structure and contracting. We continue to hope for a safe and timely resolution including the return of Qatari and Emirati LNG volumes to global markets. Coming into the year, the industry was expecting a roughly 40 million ton LNG supply growth. This expected supply growth continues to be offset by the halt of Middle East LNG flows through the Strait, which removes approximately 7 million tons of supply each month.

Additionally, U.S. exports were temporarily reduced during winter storm Fern to help balance the domestic gas market, and in late March, Australia's approximately 9 million ton per annum Wheatstone facility and other gas processing plants experienced a multi-week outage following Cyclone Narelle. In aggregate, these disruptions displaced nearly 8 million tons of supply in the first quarter alone.

With tanker and LNG vessel traffic through the strait remaining constrained with limited visibility on timing of normalization, approximately 7 million tons of LNG supply per month, or approximately 100 cargoes, continues to be disrupted. The immediate effect of the crisis was a sharp repricing across regional gas markets. And given most Qatari volume is sold into Asia, we saw the JKM TTF spread flip in a way not seen since the third quarter of 2023, creating a strong pull for LNG into Asia.

Destination flexible U.S. cargos responded as expected, with flows re-optimizing toward Asia to capture higher netbacks. This is exactly the flexibility the market relies on in periods of imbalances or distress, underscoring a key advantage of U.S. LNG in the global gas market. While today our customers are squarely focused on replacing near-term lost volumes, the flexibility and security of the U.S. LNG through long-term contracts is being highlighted in our commercial conversations and negotiations today.

On the demand side, impacts have been more gradual. Middle East cargoes that were already on the water continued to arrive through March, which delayed the full physical effect of the supply disruption. Asia's LNG imports were 5% higher year-on-year for January and February, but started decreasing in March, dropping by 1.5 million tons, or 7% year on year, with import declines in price-sensitive markets expected to continue in April.

Now, several months into the disruption, we're seeing clear differentiation across markets in Asia to cope with the supply shock. China has again demonstrated system flexibility, halting spot purchases and redirecting cargos to markets of higher need. Price-sensitive Qatari-dependent markets, such as Pakistan, India, and Bangladesh, have taken measures to reduce demand and seek alternate fuel sources.

While higher affordability markets, including Taiwan, Singapore, and Thailand, have stepped in to procure replacement cargos, and we have been actively supporting our customers navigating this volatility. In Europe, the situation is increasingly tight, as storage levels exiting the winter are near five-year lows, with a deficit of 13.2 BCM, about 10 million tons or approximately 150 cargos of LNG equivalent versus the five-year average.

While the region is relatively less exposed to disrupted Middle East LNG flows compared to Asia, the absence of Russian pipeline flows and the impending ban on Russian gas and LNG at further pressure. To reach adequate storage levels ahead of next winter, Europe will require almost 10 million tons more LNG than last year to reach minimum storage levels of 80% and approximately 15 million tons more year on year to reach historical levels of 90%.

This highlights Europe's dependence on LNG and intensifies the competition for marginal LNG supplies with other basins, especially as we look ahead to winter. Europe's imports grew 12% to approximately 40 million tons in the first quarter, despite a month-on-month drop in March, which remained flat year on year as more cargoes started heading east.

Across global markets, pricing dynamics evolved in two distinct phases in the first quarter. At the start of the year, benchmark gas prices were moderating, reflecting expectations of that forecast 40 million tons of incremental supply to enter the market. First quarter JKM averaged $10.40 MMBtu and TTF $11.60, down by roughly 30% and 20% year-on-year respectively. Following the disruption in the Middle East, we've seen a clear repricing, with prompt pricing and forward curves moving higher by $3 to $4 an MMBtu.

However, despite the disruption of comparable magnitude, these prices still reflect much lower levels than $22, following the onset of the Russia-Ukraine war, which we believe stems from the market's expectation that the disruption will prove temporary and potentially quick to resolve. The Henry Howe curve, by contrast, has remained relatively flat, reinforcing its position as a stable pricing anchor.

Let's turn to the next page to expand on what this means longer term. Uncertainty around the disruption in the Middle East remains high, and we continue to hope for a swift resolution with limited lasting structural impact. However, even under that assumption, the supply outlook over the next few years has shifted. The industry has effectively lost two liquefaction trains in Qatar, representing approximately 12.8 million tons per annum of capacity, which could be offline for up to five years.

We're also likely to see delays to major expansion projects in the region in both Northfield in Qatar and Ruwais in the Emirates. As shown in the chart on the left, even if flows normalize into the summer, most, if not all of the previously expected growth in 2026 will be absorbed.

Directionally, '26 is much tighter than previously forecast and now '27 has become a more structural constraint, especially considering the record low storage position and supply dynamics across Europe heading into the 2026 winter I just discussed, likely creating a similar scenario ahead of winter 2027, before eventually net supply growth resumes as new projects in the U.S. and smaller ones elsewhere commence operations and ramp up production the rest of this decade.

We expect the market to return to a more well-supplied position as new supplies start fully offsetting volume losses and Qatari projects get back on track after that. So timing matters, but in most scenarios, the near-term buffer has been greatly reduced while the broader trajectory after the next year or two remains relatively unchanged. The LNG market is still expected to grow to approximately 600 million tons by around 2030.

As new supply comes online, we would expect that growth to help moderate prices. This would be particularly welcomed by price-sensitive markets that have been constrained in recent years by sustained higher prices. Importantly, demand growth continues to be driven by a diverse set of markets, from established importers in Asia to emerging consumers in South and Southeast Asia who need to supplement rapidly depleting domestic fields, to continued demand support in Europe, where the complete ban on Russian molecules has and continues to create a structural demand anchor for the LNG market.

At Cheniere, our focus remains consistent, providing reliable, flexible, long-term LNG supply to a broad and growing set of global markets, and doing so through a mix of direct relationships that expand access while maintaining the credit profile in our customer portfolio required to support long-term investment. It is these strategic relationships that underpin not only our current business and infrastructure investments, but also our expansions.

With over 35 long-term creditworthy counterparties, we remain resolute in our commitment to them and our differentiated track record of performance, which is recognized and appreciated by our customers, particularly in volatile market conditions like these. That differentiation on reliability is a significant commercial asset, and we're leveraging this as we engage with customers today with a focus on commercializing the balance of CCL train 4, now that SPL train 7 is sufficiently commercialized.

So while the disruption we're seeing today is significant and it's difficult to fully assess in real time, over the long-term events like these tend to become relatively small inflections in a much broader, longer-term growth trajectory. And from that perspective, the underlying need for reliable, long-term LNG supply and the agreements that enable it is only being reinforced.

With that, I'll turn the call over to Zach to review our financial results and guidance.

Zach Davis

Thanks, Anatole, and good morning, everyone. I'm pleased to be here today to discuss our financial results and improved outlook for the full year.

Turn to slide 11. For the first quarter, 2026, we generated consolidated adjusted EBITDA of over $2.3 billion and distributable cashflow of approximately $1.7 billion. Compared to the first quarter of 2025, our first quarter 2026 results reflect higher volumes of LNG delivered thanks to the substantial completion of trains one through four last year of stage three, higher contributions from optimization upstream and downstream of our facilities and a one-time alternative fuel tax credit during the quarter. We recognized an income 646 TBtu of LNG produced from our facilities in the first quarter.

While meaningfully higher than 1Q of 2025, first quarter of 2026 volumes were impacted by in-transit timing dynamics that favored 4Q 2025 and 2Q 2026. Looking to the balance of 2026, it's likely 1Q will be our lowest quarter of volume recognized this year. As asset production, the remainder of the year is expected to benefit from the rest of stage three coming online, including mid-scale train five at the end of one queue and train six expected to produce first LNG imminently.

In addition, there are no major turnarounds planned this summer and lower ambient temperatures should benefit four queue, making the last quarter of the year likely our highest quarter of LNG produced and recognized in income. Additionally, for the first quarter, we generated a net loss of approximately $3.5 billion, which is primarily the result of the unrealized non-cash derivative impact predominantly related to our long-term IPM agreements and the mismatch of accounting methodology for the purchase of natural gas and the corresponding sale of energy.

The derivative accounting treatment coupled with the long-term duration and international price basis of our IPM agreements result in fluctuations in fair market value from period to period as LNG curves move, which you may remember similarly impacting our GAAP net income results in 2021 and 2022. The surge in international gas prices and increased volatility during the quarter drove the unrealized non-cash losses and our overall net loss for the quarter.

Adjusting for these non-cash unrealized derivative losses and the associated impacts to income tax and non-controlling interests, we generated positive adjusted net income of approximately $1 billion for the quarter. This adjusted net income figure is aligned with our EBITDA and DCF and more representative of our financial performance in the quarter.

To be clear, as we deliver on our IPM agreements that are accounted for as derivatives or economic hedges that mitigate future cashflow volatility, we expect these non-cash unrealized mark-to-market losses to unwind over time and generate mark-to-market gains as we realize the intended and corresponding fixed liquefaction fees from these contracts that pass through the LNG market price exposure to our IPM counterparties. While IPM agreements may contribute to variability in our reported GAAP net income, those agreements most importantly provide a stable, long-term cash flows similar to our SBAs that help support our contracted infrastructure platform and cashflow visibility for decades to come.

As Jack and Anatol noted, our business model is built to thrive regardless of market environment, and the same goes for our capital allocation plan. During the quarter, we deployed approximately $1.2 billion towards our capital allocation pillars of accretive growth funded with equity cashflow, shareholder returns in the form of buybacks and dividends, and balance sheet management. In the first quarter, we repurchased approximately 2.7 million shares for over $500 million, highlighting the opportunistic nature of the program, considering the movement of our share price over the quarter.

Given the volatility in the shares year to date, our disciplined value-based repurchase plan is working as designed, and we continue to opportunistically deploy the remaining over $9 billion under our current authorization, according to the framework, which guides repurchase activity. working towards our current target of 175 million shares outstanding around the end of the decade. For the first quarter, we declared a dividend of $0.555 per common share, representing a payout of over $116 million for common shareholders.

We remain committed to growing our dividend by approximately 10% annually through the end of this decade. Share returns achieved through the completion of our dividend and opportunistic share repurchase plan are a key value proposition for our investors, providing them with a stable and growing dividend and increased ownership in Sabine Pass and Corpus Christi over time, while maintaining the financial flexibility essential to our long-term capital allocation plan.

Moving to the balance sheet, we repaid over $250 million of our indebtedness with cash on hand during the quarter, fully redeeming the remaining SBL 2026 notes and amortizing a portion of the SBL 2037 notes. Additionally, in March, we issued $1 billion of 2036 notes and $750 million of 2056 notes at CEI, making our inaugural 30-year issuance and extending our maturity stack into the second half of this century, alongside a growing list of our long-term LNG contracts.

With a portion of the proceeds, we prepaid the $550 million drawn on our Corpus Christi term loan, while also canceling an additional $600 million of unused commitments. We continue to maintain substantial liquidity with approximately $1.8 billion in consolidated cash and billions of dollars of undrawn revolver and term loan capacity throughout the Cheniere complex.

Also in the quarter, we continue to receive recognition from the credit rating agencies as Moody's upgraded its ratings of our unsecured notes at CEI and CCH to BAA2 and BAA1 respectively, each with a stable outlook. We are now high triple B at both projects and mid triple B or better at the unsecured corporate levels by all three credit rating agencies.

During the quarter, we funded approximately $1 billion of growth capital across our business. As we continue to progress the construction of stage three and Midscale 8 and 9, development of the SPL and CCL as well as our Gregory Power Plant to support incremental power needs at Corpus over time as the Midscale trains are completed. Of the $1 billion of growth CapEx in the quarter, approximately $300 million was equity funded and approximately $700 million was efficiently debt funded as planned via our delayed draw Corpus Christi term loan, as well as from a portion of the proceeds from the recent CEI bond rates.

We do expect to increase our spending on Train seven at Sabine Pass later this year, as we have budgeted for potential limited notices to proceed to Bechtel ahead of our expected FID early next year, which is why we are retaining cash at CQP by flexing the variable component of the CQP distribution this quarter. Looking ahead, we remain well positioned to fund our discipline growth objectives comfortably within our cashflow forecast, while retaining our strong investment grade credit metrics and our significant financial flexibility for shareholder returns through cycles.

Turn now to slide 12, where I will discuss our upwardly revised 2026 financial guidance and outlook for the year. Today, we are increasing the midpoint of our guidance ranges for full year 2026 consolidated adjusted EBITDA and distribute cashflow by $500 million and $400 million respectively, bringing expected consolidated adjusted EBITDA to $7.25 to $7.75 billion and distributable cash flow to $4.75 to $5.25 billion.

We are maintaining our CQP distribution guidance for the year of $3.10 to $3.40 per common unit. These increases are attributed to a few key drivers, including an increased production forecast for the year, an improved margin outlook, and contributions from optimization activities already locked in year to date, both upstream and downstream of our facilities.

As Jack mentioned, thanks to increased utilization of our existing trains as a result of continued debottlenecking and resiliency efforts related to feed gas composition variability, as well as accelerated timelines on the remaining trains at Stage three, we are increasing our 2026 production forecast by approximately 1 million tons to approximately 52 to 54 million tons for the year, unlocking incremental volumes available for CMI this year. With this increase in continued forward selling by our team over the quarter, we still forecast less than 1 million tons or less than 50 TBtu of unsold open volumes remaining in 2026.

Therefore, we currently forecast that a $1 change in market margins would impact EBITDA by again, less than $50 million for the full year. Despite having very little open exposure for the balance of the year, we are maintaining the $500 million guidance range as results could still be impacted by a number of factors, particularly given the sustained volatility in the global energy markets, but also variability in our production forecast.

The ramp up and specific timing of substantial completion of Trains six and seven at Stage three, the timing of certain cargos around the year end, contributions from further optimization activities during the balance of the year, and the impact Henry Hub volatility can have on lifting margin. As we progress through the year and lock in some of these variables, we will look to tighten these ranges as we have done in years past.

Our first quarter result, coupled with our revised guidance ranges, once again underscore Cheniere's ability to leverage our platform, respond to market signals, and unlock optimization opportunities throughout our business, while still maintaining our highly contracted business model built upon a foundation of long-duration fixed fee cash flows from credit-worthy counterparties, our conviction in which has only been reinforced as we look forward to funding additional accretive brownfield growth at both Sabine and Corpus, while concurrently growing shareholder returns in the form of buybacks and dividends that can be relied on year after year.

These dependable cash flows are essential to the over $50 billion natural gas infrastructure platform we have developed over the last decade plus, as well as our disciplined all of the above capital allocation framework. And the durable through cycle value of this approach has only been enhanced in the wake of the current market environment. Looking ahead, we remain focused on maintaining safe and reliable operations to ensure we can continue reliably delivering flexible, secure LNG, as well as meaningful long-term value to our stakeholders around the world for decades to come.

That concludes our prepared remarks. Thank you for your time and your interest in Cheniere.

Operator

Operator, we are ready to open the line for questions. Thank you. If you are dialed in via the telephone and would like to ask a question, please signal by pressing star 1 on your telephone keypad. If you are using a speakerphone, please make sure that your mute function is turned off to allow your signal to reach our equipment. Please limit yourself to one question and one follow-up before rejoining the queue. Again, you may press star 1 to ask a question. We'll pause for just a moment to allow everyone an opportunity to signal. We'll take our first question from Jeremy Tonet with JPMorgan.

Jeremy Tonet

Thanks for all the color today. I just wanted to expand a bit on some of the remarks. And Anatole, I was just wondering, you know, in the customer conversations at this point, you know, given the disruptions in the Middle East, just, you know, how you describe the tone or appetite for U.S. LNG, given the reliability and engineers track record there. And then at the same time, kind of contrasting that to, you know, somewhat higher prices and how that impacts demand for LNG overall. So just wondering you know how those two factors have kind of flowed through conversations.

Anatol Feygin

We were in a very enviable position as the plants run better and as you see we have some additional volume and we only have these three dozen kind of critical long-term counterparties we're able to really focus on supporting these key relationships, and that's what we've been doing over the last couple of months. And as you can imagine, the initial reaction by a number of these players is to ensure that there is ample supply as this 7 million tons a month is replaced to keep the lights on, literally, in the short run.

But clearly, our ability to support them is something that's helped to broaden and deepen and the relationships, and is certainly a tailwind to a number of those engagements.

In terms of longer term, sorry, your second question, we'll see. I think even amongst ourselves, we disagree somewhat. I think that just like COVID, when you look in the rearview mirror at that 2020 disruption, it is a small blip. It changed the dynamic purely by kind of delaying what we're expecting by somewhere between 12 and 18 months, but the overall trajectory remained the same. We expect this issue and hope that this issue is similar, but again, we're in a great position.

We need to support our growth ambitions with relatively modest incremental commercial agreements, And clearly, we've proven that this is a very affordable, reliable, and Cheniere is a great counterparty to help support those long-term ambitions by our customers.

Jeremy Tonet

And then, just want to turn, I guess, to operations and execution. Maybe you could expand a bit more on, you know, the Corpus expansion, seem to be tracking a bit ahead of expectation for timeline there, and at the same time, you know, being able to eke out a bit more capacity, I was just wondering if you could talk through what the bottlenecks you were able to accomplish there, and I guess what more could be possible.

Jack Fusco

So, as I said in my prepared remarks, I'm extremely pleased with what we've been able to do in operations and production engineering. Corpus, you know, not only have the trains been coming in significantly above the guaranteed schedule from Bechtel or before the guaranteed schedule from Bechtel, but on our ramp up, it's been higher and steadier. So the team has really learned how to make those smaller mid-scale trains hum, and that's producing some very good quantities for us. So, and I would expect that those learnings to continue to work their way through six, seven, eight, and nine at a minimum. So that's been very helpful.

The other thing that's been helpful is we figured out a couple of different operational modes to handle variability of feed gas at both Sabine Pass and at Corpus Christi. We've actually have worked with some good suppliers solvents to come up with some creative ways to use solvents to mitigate the need for defrost. All of those things there's a hundred different things in our toolkit right now that we use every single day and they all seem to be adding up to some meaningful amounts of additional production and that's what you're seeing from us on this race of guidance.

Zach Davis

And then, Jeremy, on the growth and the expansion, just to put into perspective, right now, on the whiteboard is Sabine 7. You could tell from the CQP DPU guidance and where we ended up with Q1, we're reserving cash as we're in good shape to start LNTPs later this year and be in a position with the permit to FID that project early next year. In terms of the Corpus expansion, that's a bit behind just because we didn't file for the permit until after we officially announced FID and NTP on Trains 8 and 9. But that's in good shape and tracking to receive a permit, let's say, mid- to late next year.

And in the context of the previous question to Anatole, like we can be very disciplined on the SBAs considering we have approximately 10 million tons of SBAs today that haven't been used yet to underpin or underwrite an FID project. That's more than enough to cover the Sabina 7 project plus the bottlenecking. And we're obviously in good shape on even the first train of the first phase of a Corpus expansion.

So we can stay quite disciplined, not just on how we grow and the parameters that we hold ourselves to that are like leaps and bounds beyond anyone else in the industry, especially in North America, and then we can be disciplined on the SBAs and eventually move forward and create some value for the company long-term.

Operator

We'll take our next question from Spiro Dounis with Citi.

Spiro Dounis

Maybe just picking up on some of those comments as we think about the contracting outlook Maybe just picking up on some of those comments, as we think about the contracting outlook, there does seem to be some expectation that we're now going to see perhaps a wave of contracting for U.S.-sourced LNG, and I understand your point that a lot of the focus so far has been filling that near-term supply, but is the market wrong in maybe expecting some sort of contracting wave? Maybe just based on your discussions, would you be surprised if Corpus 4 Phase 1 is not underwritten with SBAs by year-end?

Anatol Feygin

So, I think your overall thesis is correct. You know, there aren't that many options as we've discussed, you know, forever. And even in these prepared remarks, we keep demonstrating that this is a great place to source volumes, right?

The customers that are lifting from us FOB at today's NYMEX economics are lifting roughly six dollar at six dollars an MMBtu and with the reliability and flexibility that we've demonstrated over a decade so if not now if not us you know whom and when that said as we've also discussed and Zach alluded to this is a very competitive market we are in a market today where there are some incredible projects that are moving towards FID, and a lot of projects that have FID that have spare capacity that has yet to be placed into the market.

So we're fortunate in that we will continue to not participate in that commoditized race, and we'll, as Zach already alluded to, pick and choose with whom we want to continue to partner. And crystal ball-wise, I think you'll continue to see from us same thing that you've seen for the last four or five years, which is additional volumes with existing customers. I made a joke that I'm kind of in a race with Shell. Shell keeps buying our counterparties and decreasing the number of our counterparties, and we keep trying to add some more long-term contracts with the Cheniere premium built in. So we're optimistic.

We have made a significant dent into Corpus Train 4, and whether it's year-end or by the time we're ready to FID, we think we'll be in a very good commercial position to support that.

Spiro Dounis

And maybe, don't put the crystal ball away just yet, just didn't want to touch on LNG prices here. As you think about Europe needing to refill that storage, and all your comments sound like there's a pretty aggressive ramp in cargoes that needs to happen to do that, and perhaps even extend to the 2027. So I'm curious, are you surprised that prices have not been stronger here? And when would you think you could start to see that play out on the curve? And when you look out beyond 2027, 2028, we haven't seen it move all that much. Do you think it's appropriate reflecting some of these lingering supply issues?

Anatol Feygin

I and I think I could say on behalf of the team, we are astounded that prices are where they are, that prices in Europe and Asia are backward dated into the winter. US is up 50% into the mid-4s in the winter, but the world gas market is strangely backward dated. Europe is in a very difficult position with really adjusted for flows, record low storage, banning Russian gas, and the Indian subcontinent, the price sensitive market has already been turned off. So we're going to be in an environment in Q3, Q4, we think, where there's very aggressive competition for those volumes globally.

China has done an excellent job of using its storage and domestic production to be a relief valve again. And I think the current situation is masked by the fact that we're in the shoulder period and the physical disruption of deliveries from the straight being closed really only started to be felt a month ago. So we are, we're very constructive on where prices will go into the second-half of the year. And as you already alluded to, that probably reverberates into '27, which again, will just highlight how attractive the long-term SBA from Cheniere is to those that can, you know, meet Zach's stringent credit requirements. A couple, as always.

Operator

Our next question comes from Jean Ann Salisbury with Bank of America.

Jean Ann Salisbury

I think you've suggested in the past that after Sabine Pass seven in Corpus IV and blue sky growth case, future trains beyond 75 MTA would be more likely to be at Corpus. Can you talk about the trade-offs between your two sites for expansion both for the potentially next two trains to be in Pass 7 and Corpus 4 and then beyond that?

Jack Fusco

Yeah, hi Jean Anne, it's Jack. Corpus has been blessed with having another 500 acres of basically untouched land. We bought that land from the old Sherwin-Illumina site. We've been working on that property to make sure that it's environmentally ready to go. It has great access to the water. It has a power plant that sits literally right next to it, which is our Gregory Power Plant that we own and control. So it has a lot of, and it's close to the Permian. It's a 40-mile straw to our Sinton Station for gas supply to Aqua Dulce. And it just has a lot of benefits that I could see us continue to grow that site.

If we switch to Sabine, while we still have property, we have a lot of wetlands property that we'd have to mitigate appropriately. That adds cost to it. And there's a few other nuances that we would have to do. But on the positive side, we have three births already at Sabine. So it's not out of the question. But I do think additional growth after the first phases will probably happen at Corpus prior to Sabine, just my gut. And that is way down the road from where we are today.

Operator

We'll take our next question from Jason Gabelman with TD Cowen.

Jason Gabelman

First on the 2026 EBITDA guidance, I think you typically are a bit more conservative early in the year ahead of summer maintenance season. But given that it seems you're guiding to lower maintenance this year, is there a bit less conservatism baked into the plan at this point, and then my follow-up is maybe just on what you're seeing across the world from governments in response to higher global gas prices. You know, it's the second kind of period of high prices and very volatile prices in the past five years. Have you seen any reaction, especially from the Asian countries, to perhaps pivot more towards long-term planning for coal and renewable power over gas?

Zach Davis

I'll take the first one on EBITDA. I know I hear a lot of analysts say that we're often conservative early on in the year, but I'll say like what we basically, I don't know if this is different than most companies, we don't over promise. When you look at our proxies and where we set budgets and targets for the company, it's very consistent with our initial guidance.

The reason we were able to raise it this time is quite a few things, like production coming through in a way, not just with mid-scale trains coming online quicker and ramping up quicker, thanks to just the teamwork with the Bechtel folks of handing it over, it's all the resiliency work we've done since last year that's boosting the production guide for the year. That's adding with margins, let's say, in the $9 to $10 range, $400 million bucks. That doesn't sound too conservative. That just is what it is with where the current base case is on production.

Then you add in margins are up since the last call on less than a million tons, that adds $100 million bucks. Optimization, we don't bake in optimization that hasn't been locked in yet. We've been pretty clear with that on our guidance calls. We're able to add another $100 million. And then Henry Hub has actually come down since February a bit for the rest of the year, which offset that and was why we raised it by $500 million. Do we feel good about that range?

Very much so, but there's still some moving parts in that, like if Henry Hub moves by 50 cents either way with how much LNG we're producing, like that's a hundred million dollar swing. If Train six and seven of mid-scale move by a half a month, that's like a $50 million swing. And then we have about 50 million or less for every dollar move on those CMI margins, which seem pretty volatile at times. And then on top of that is just overall LNG production. If we add an extra 10 TBtu, that can be a hundred plus million dollars.

And then O&M for the scale that we have, that's usually plus or minus 20 or so million a year. So when you add all that up, that's why we stick to a $500 million range. But again, this company doesn't like to over promise. We prefer to over perform. But again, this company doesn't like to over promise. We prefer to over perform.

Anatol Feygin

Yeah Jason and on your question about pivoting away from gas, really haven't seen that yet now. It's fairly early in this disruption. I do think that the market, having experienced it in late February, was thinking that the resolution is going to be fairly quick. We were skeptical and it still seems like the market thinks that this gets resolved in weeks and we don't see normalization for months. After the Ukraine war, you did see a couple of governments and plants shift away from gas.

Again, we're not seeing that, and just to put into context, those entities that can transact on a long-term basis are seeing gas prices on a deliberate basis from us that are well within, if not below, their planning ranges. So those places that, again, are creditworthy and are capable to transact on a long-term basis and are not whipped around by spot prices really have no reason to reconsider. But in the grand scheme of things, don't forget that our product, LNG, is only about 3% of primary energy. So it's not a solution for the world, it's just a very elegant way to complement things like reliability, things like intermittency, things like emissions.

So we're, again, we're still optimistic that this will be in the rearview mirror soon, and the world will continue to grow to the 700 million ton plus market that we expect in 2040.

Operator

Our next question comes from Alexander Bidwell with Webber Research & Advisory.

Alexander Bidwell

Wanted to look at. Sorry, excuse me. 1, take a look at the future expansions at Corpus. We've been seeing a ramp labor competition. Across various projects in the US Gulf, do you expect that to have a knock on impact in terms of costs for the future Sabine and Corpus expansions?

Jack Fusco

No, I think the timing of our FID will work very well with those current schedule and their growth projections. And we haven't seen an issue with any of our mid-scale 5,000 workers there. So I don't see a problem, Alexander.

Zach Davis

And I think there is a nice cadence with Midscale completing Stage 3 this year and then 8 and 9, and then eventually the ramp-up starting next year and into '28,'29 with Sabine 7. And then again, upon that, after that, there's also the ramp-up with TCL 4. So the cycle is in our favor, that it's slightly off from many of these projects that have FID recently or are desperate to FID right now.

Alexander Bidwell

Just to follow up on the mid-scale train performance, can you guys give us a sense of where I guess the natural differences have been in terms of op-ex and maintenance thus far versus your traditional large-scale trains?

Jack Fusco

Alexander, I think it's a little too soon for us yet. I would say they've been a little bit equal, maybe a little higher on the mid-scale as we continue to debottleneck. So it's hard for me to segment sustainable operations and maintenance versus some of the debottlenecking activities that we've been doing on the individual trains to get more output out of them. But give us a little more time with having the operations under our belt and we'll try to help with some transparency there.

Zach Davis

One note already one note. I'll make though is that the midscale trains will require more power So you'll just see that incrementally in cost of goods sold related to those even though as we scale that up It's going to be pretty straightforward and pretty consistent with the other 15 million tons at Corpus. So get a little more scale beyond just five trains, and they'll get relatively close. It'll just be in different buckets to an extent, as it requires more power.

Operator

We'll take our next question from Manav Gupta with UBS.

Manav Gupta

You are one of the few midstream companies that, besides dividends, also reward shareholders with buybacks. And I'm just trying to understand, given the current environment and the amount of free cash you are generating, how are you thinking about stock buybacks here?

Zach Davis

Well, I would say today we feel very much so like we're enjoying the stock buyback. With that said I'll say a few things. First and foremost around our buyback, it's meant to be opportunistic and disciplined. Our stock basically varied between like $200 or less to $300 in Q1 and we bought over a half a billion dollars at $202. So that shows the discipline and opportunistic nature of it. We did buy back over a billion dollars in Q3 and Q4. But that had a lot to do with the fact that we brought back less than $700 million in the first half of last year, and we rolled over the allocations.

Because though deployment may be bumpy or opportunistic quarter-to-quarter, the allocation in cash reserve for buybacks is not. That is very steady, and why we were able to commit to a $10 billion buyback program through the rest of this decade quite easily. The other thing I would guide folks to is our payout ratio. And so as we think about a shareholder return payout ratio, which combines the dividend and the buyback versus our DCF, it's basically been around 50%, 60% a year, which is at the high end of almost any midstream peer. It just happens to be that we're basically the only one that does buybacks to the extent that we do.

And I would continue to follow that through. So as DCF grows, clearly there's more cashflow in the mix, but like the balanced capital allocation plan is firmly intact. And we are budgeting for this decade to FID, not just to being set in early next year, but a first phase of Corpus as well by mid to late next year as well. So with that cashflow kind of reserved, and the fact that we could still commit to 10 billion, You should expect buybacks to continue to compound quarter after quarter. But if DCF keeps on going up, there will be more in the coffers for buybacks. That's where the excess cash goes.

And if there's even a month delay in FIDs, that means there's more free cash flow as well for buybacks in the near term. So, yeah, expect more of the same, but it will be lumpy at times, but it'll definitely be opportunistic.

Operator

We'll take our last question from Burke Sanseviero with Wolfe Research.

Burke Sansiviero

So, understood that you aren't taking in any optimization that hasn't been locked in with the updated guide. But curious if you could provide any additional color on what potential upside optimization could look like for the balance of the year, all else equal?

Zach Davis

It really can come from anything across the integrated platform, and there's just a different edge to this company versus anyone else in LNG. Having the pipeline network that we do, the two facilities, and then not just CMI handling the open capacity, but handling our DES contracts as well as our ITM contracts. That scale just gives us a different level of ability to optimize, and we do expect more optimization through the rest of the year. Mind you, there were certain things that happened in the past quarter, including the winter storm fern, that we were able to provide some of our gas back into the U.S. gas market as it was needed.

There were also the spikes in shipping and in LNG prices after the war broke out in late February, that we were able to provide ships and LNG to customers that needed them rather desperately. And those are things that obviously we couldn't even have forecasted the same week that some of these things occurred.

So having the scale, having an integrated platform, really does give us an edge that we were able to, in the past three months, buy cheaper gas upstream of our facilities that was part of the optimization upstream of us to being in Corpus, we were able to source third-party cargos, which you could see in the filings and in the financials for the past quarter, and I think over like 30 TBtu was third-party sourced. That freed up some shipping and was able to optimize certain cargos as well.

So things like that, more likely to come, and yes, there was one thing conservative I guess about the guidance is that we don't bake in any more of that in the current guidance of let's say $7.5 billion of EBITDA. And just as you think about the platform continuing to expand and these trains continuing to come on additional DS and IPM contracts come with additional shipping that is paid for by those contracts. So as we are speaking with you today we have I believe the highest number of vessels we've ever had in our portfolio.

And that will continue to grow and again is paid for by those long-term commitments, but gives us the opportunity to take advantage of volatility in the market. But as Jack said, our crystal ball is not good enough to tell you what opportunity will be here next week, much less over the second-half of this year.

Burke Sansiviero

And just curious if you've been able to opportunistically hedge some of your open exposure into 2027, a little earlier than the normal cadence as margins move higher?

Zach Davis

Yeah, I'll speak to that. We do use, like, our financial capacity and some hedging capacity for the prompt year and sometimes for the year after. With that said, usually we try not to financially hedge too far out considering how much volatility there could be and considering we're in a shoulder season right now and we're heading into Asia cooling season and then eventually European storage filling season. So financially hedging is not really the priority for 2027. With that said, since the last call, we've sold over a million tons of open capacity in 2017.

So margins were basically under $4 as of the call in February, and now they are closer to six to seven bucks, and when we see that and we have willing buyers, we lock it in. So we've already made a dent on the open capacity next year, which only strengthens the cashflow of visibility, and obviously the cash in the coffers for things like buybacks.

Operator

That concludes our question-and-answer session. I'd like to turn the conference back over for any additional or closing remarks.

Jack Fusco

Hi. This is Jack. I just want to thank you all again for your support of Cheniere. This concludes today's call. Thank you again for your participation.

Operator

You may now disconnect and have a great day.