Executives: Randy Bhatia - VP, IR Jack Fusco - President and CEO Anatol Feygin - EVP and CCO Michael Wortley - EVP and

CFO
Analysts: Jeremy Tonet - JPMorgan Christine Cho - Barclays Alex Kania - Wolfe Research Ted Durbin - Goldman Sachs Craig Shere - Tuohy Brothers Michael Webber - Wells Fargo Matthew Phillips - Guggenheim James Carreker - U.S. Capital Advisors Fotis Giannakoulis - Morgan Stanley Pavel Molchanov - Raymond James Jean Ann Salisbury -

Bernstein
Operator: Good day and welcome to the Cheniere Energy Second Quarter 2017 Conference Call. At this time I'd like to turn the conference over to Randy Bhatia, VP of IR. Please go ahead.

Randy Bhatia: Good morning and welcome to Cheniere Energy's second quarter 2017 earnings conference call.

The slide presentation and access to the webcast for today's call can be found on our website located at cheniere.com. Participating on today's call are Jack Fusco, Cheniere's President and Chief Executive Officer; Anatol Feygin, Executive Vice President and Chief Commercial Officer; and Michael Wortley, Executive Vice President and Chief Financial Officer. Before we begin, I would like to remind all listeners that our remarks, including answers to your questions, may contain forward-looking statements. 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 risk.

In addition, we may include references to non-GAAP financial measures, such as consolidated adjusted EBITDA, distributable cash flow and distributable cash flow per share. A reconciliation of these non-GAAP measures to the most comparable GAAP measure can be found in the appendix of the slide deck. As part of our discussion of Cheniere Energy, Inc.'s results, today's call may also include selected financial information and results for Cheniere Energy Partners, L.P., or CQP, and Cheniere Energy Partners LP Holdings, or CQH. On this call, we do not intend to cover CQP or CQH's results separately from those of Cheniere Energy, Inc. After our prepared remarks, we will open the call for Q&A.

As shown on the agenda on slide three, Jack will begin with an overview of the quarter and give an update on construction and operating progress at our liquefaction projects. Following Jack's comments, we will hear from Anatol on our commercial activities; and then from Michael, who will review our financial results. I will now turn the call over to Jack.

Jack Fusco: Thank you, Randy, and good morning, everyone. I'm pleased to be here today for Cheniere's second quarter 2017 earnings call.

We had a great quarter and our outlook on the full year has improved, so we have raised and tightened our full year guidance. Our LNG trains entering service earlier than expecting LNG production has ramped up faster than we forecast and our trains performance has been outstanding. Before we review the results and highlights I'd like to spend a minute looking back on the last year as the second quarter marks my first anniversary of joining Cheniere as President and CEO. And it was a year defined by unprecedented transition and achievement. In just one year's time, we have declared substantial completion on three LNG trains at Sabine Pass and we expect to do so on the fourth over the coming months.

We have produced and we have exported approximately 150 cargos of LNG, we have raised over $10 billion of capital to strengthen our consolidated balance sheet and liquidity, achieved investment grade credit rating at SPL, became the largest physical consumer of natural gas in the United States on a daily basis, became one of the largest charters of LNG vessels in the world and have commenced 20 year contracts with three of our foundation customers. All while implementing significant organizational changes internally. In the last four quarters, we have generated over $1 billion in consolidated adjusted EBITDA. From the second quarter of 2016 through the second quarter of 2017 LNG shares are up approximately 30% and have outperformed energy industries, broad market industries and benchmark commodity prices over that period of time. We have turned into a proven LNG operator and have done so by and large without incident and have made it look easy.

Certainly we have encountered our fair share of challenges over the last year. But what we have accomplished is in many instances unprecedented and therefore all the more impressive and we hope the market will begin to recognize that. Once again I'd like to acknowledge the hard work and dedication of Cheniere's professionals around the world for their efforts and the achievement of these accomplishments. With that said however we are just being started. I don't view these achievements as milestones, but rather a stepping stone or a platform as we have positioned ourselves for significant growth via strategic business development efforts and world class execution throughout the company.

The accomplishments I just mentioned are certainly not exhaustive, there are many more over the past year, but the central premise behind each is that they fit into our broader growth strategy and we look forward to delivering on that growth. Now let's turn to slide five. For an overview of some key operational and financial highlights for the second quarter of 2017. In the second quarter of 2017, we generated consolidated revenue of over $1.2 billion and $371 million in consolidated adjusted EBITDA. Growth in all metrics compared to the 2016 period is driven primarily by our continued transition into operations at our Sabine Pass Liquefaction project.

During the second quarter, we exported a total of 48 cargos of LNG from Sabine Pass none of which were commissioning cargos. For the six months of 2017, we exported 91 cargos of LNG from Sabine Pass, seven of which were commissioning cargos. Thus far LNG from Sabine Pass has reached 24 of 40 LNG importing countries around the world. Having our product already reached over half of the current addressable LNG markets is a key competitive advantage as we look to commercialize new capacity. Anatol will provide some color on the market for LNG cargos during the quarter in a few minutes.

During the second quarter, we are once again active in the bond market to term out our bank capacity. Michael will cover our financial activity in a few minutes, but highlighting the quarter was a $1.5 billion bond offering at Corpus Christi, and the receipt of our third investment grade credit rating at Sabine Pass Liquefaction. As I've stated on previous calls, we remain committed to managing the balance sheet throughout our structure and plan to continue to leverage our improving credit profile opportunistically as part of our long-term balance sheet strategy that Michael discussed during our Investor Day last April. Now on slide six, slide six provides an update on construction progress at our LNG projects at Sabine Pass in Corpus Christi. We remained very pleased with the overall progress of construction at Corpus Christi constructions and operations at Sabine Pass.

As I've mentioned on all of our previous calls, our number one priority at the site is to execute on the construction of our LNG platform safely, on-time and on budget. Corpus Trains 1 and 2 are progressing nearly 70% project completion as of the end of June. Cheniere's E&C team and our EPC partner Bechtel have that project moving along very well and we are seeing benefits of lessons we learned nearly every day. Recent construction highlights include delivery and installations of the refrigeration compressors on Train 2 and the setting of the Train 2 methane cold box. Over at Sabine Pass highlighting the second quarter was our achievement of the date of first commercial delivery or DFCD of our 20 year contract with KOGAS.

Subsequent to the end of the quarter, in early August DFCD was achieved with Gas Natural Fenosa. In recent investor meetings, many have asked us about the progress of Train 4 which began commissioning earlier this year. I'm pleased to confirm that Train 4 achieved first LNG production in late-July. And will produce its first commissioning Cargo later this week. We expect substantial completion to occur over the next few months.

Now turn to slide seven, which identifies few of the key items influencing both long-term and short-term LNG market dynamics today. These are some of the key items we discussed with our customers other LNG market participants or regulators in the investment community. Each of these items influences how we think about our strategic efforts. So I wanted to touch on a few of them on today's call. LNG has become an important part of the global energy discussion.

And each of the items here suggests that trend will continue over the long-term. I have divided them into two different categories market driven and policy driven. First, what I'm seeing are positive developments from market driven factors on both the supply side and the demand side. On the demand side, GDP growth and growth of natural gas in the overall energy mix in key emerging markets is leading to significant increases in LNG demand. Through the first half of 2017 Chinese LNG demand is up almost 40% compared to 2016.

In places like Malaysia, Thailand and other emerging market Asian countries are up similarly. Countries in this region are undergoing significant growth and transformation and many have long-term goals of significantly increasing natural gas in their overall energy mix. As crisis have remained moderate, I have seen the effects of price elasticity of demand, which Anatol has covered on our previous earnings call. This has been aided by the development and deployment of FSRUs, which can and has unlocked new markets faster and with lower capital cost than were land based regas terminals. Additionally increased liquidity and flexibility also helps incentivize the development of new market participants.

On the supply side we're seeing favorable development with regard to both existing projects and proposed projects. Several large legacy LNG exporters in the Atlantic and Pacific basins as well as the Middle East face growing supply challenges as reserves deplete where their own domestic gas demand has grown. In fact several of these countries have already begun importing LNG to meet their needs. And on the competitive front, we recently saw the cancellation of the proposed large scale LNG project in Canada, which highlights the criticality of being cost competitive in today's LNG market. Moving to policy driven factors, certainly the most prominent lately has been the discussion of LNG from the new administration here in the U.S.

and the many benefits LNG has to the administration's economic priorities such as trade balances, domestic energy production, infrastructure investment, domestic manufacturing and of course jobs. Policy debate in key markets such as China, South Korea and Japan on environmental goals and international trade practices support LNG as a policy tool of growing importance in a more environmentally conscious global economy. The environmental peace is especially pronounced in high growth emerging market Asian economies such as China and India as they debate and implement more stringent environmental policies. As an example, just last week the National Energy Administration in China announced the country will cut 20 gigawatts of legacy coal-fired capacity by 2020, which is in addition to the already announce 150 gigawatts of coal-fired capacity either planned or under construction that will be cancelled. These sorts of policy driven environmental initiatives provide a compelling backdrop for long-term demand growth of LNG.

I look at all these factors and think about our strategic positioning in the marketplace. Most of these dynamics support my conviction that Cheniere is ideally position to capture incremental share of the LNG market by leveraging our competitive advantages of a full service LNG offering, significant in place LNG infrastructure of both sides and the expertise that has led to world-class execution and operations. And now Anatol is here to provide an update on our commercial activities during the second quarter.

Anatol Feygin: Thanks, Jack and good morning, everyone. We're proud to start our full sale and purchase agreement tied to the substantial completion of our third train with KOGAS at the beginning of June.

And as Jack mentioned subsequent to the end of the quarter, we commenced our SPAs from our second train with Gas Natural Fenosa and Shell. We look forward to a productive and mutually beneficial relationship with these foundation customers of Sabine Pass. Now please turn to slide nine, U.S. LNG continues to find buyers globally at a premium to European gas markets and they continues to demonstrate the value of its destination flexibility. By the end of the quarter, Sabine Pass volume had reached 24 countries, an increase of four since our last call, coming out of the peak demand months of the northern hemisphere winter, demand for U.S.

LNG remain resilient and widespread with cargos from Sabine Pass sent to 16 countries in just the second quarter alone. Poland received its first cargo from our facility during the quarter, the delivery that came from our own asset optimization team based on Cheniere's equity and volumes. We're very pleased and honored to attend the ceremony with the Polish Prime Minister at the Swinoujscie Terminal in early June to mark the first arrival of U.S. LNG. The first cargo was also delivered to Taiwan during the quarter.

There has been a slight uptick in the number of deliveries to Europe with the UK and Netherlands rounding up the list of new U.S. LNG importers. However deliveries to Europe remain less than 15% of overall deliveries from Sabine Pass. Cheniere's marketing group has continued to successfully place volumes from Sabine Pass benefiting from a rebound in Latin American demand. The team has also been able to capitalize on sales opportunity in Asia and the Middle East as the overall market has stayed relatively strong.

Turning now to slide 10, Global LNG supply has increased over the first half of this year with the continued ramp up of projects in Australia and our own three trains at Sabine Pass. More than $15 million tons of incremental supply came to the market through the end of June. This was in-line with most expectations, which also anticipated the traditional reduction in demand during the second quarter shoulder months. But Global LNG demand was resilient during the first and second quarters with Asian and European consumption leading the way. China's demand for LNG remains robust and is up nearly 40% in the first half and more than 50% during second quarter alone.

It's worth noting that we are in the process of opening an Office in Beijing to get closer to customers in that very important growth market. Imports into Japan, South Korea and Taiwan all increased versus last year during the first half of 2017. France, Portugal, Turkey and Spain all posted material year-over-year increases during the period and kept European demand higher. While Latin American demand is slightly negative overall in the first half. The region has rebounded in the second quarter and is up 8% as Argentina and Chile have increased imports heading into their winter.

Despite $15 million tons of incremental LNG in the market and strong pipeline exports out of Russia, Norway and Nigeria gas and LNG prices in both Europe and Asia were higher during the first half of the year compared to 2016. The Continental European gas hub TTF maintained its premium over 2016 through most of the first six months as did Asian and spot LNG prices. New LNG supply clearing at higher prices underscores the organic growth for gas globally, while the lack of growth in cargos into the balancing market of Northern Europe shows the LNG market remains more balanced in the second quarter than many were forecasting. As shown on slide 11, market conditions continue to be challenging for long-term deals as buyers have slowed the pace of contracting. However we remain actively engaged with buyers interested in term contracts.

The slowed pace of contracting for long-term supply is an industry wide trend. In addition the majority of the firm LNG contracts that have been signed over the past year and half will be supplied from liquefaction capacity already operational or under construction or from a portfolio of supply. These deals are locking in existing uncontracted capacity into term agreements and with very few exceptions are not underpinning new LNG export capacity. There has also been a bias of linkage to oil in these contracts as oil prices have dropped and leveled out over the time period. The uncertainty of future oil prices and the relationship to Henry Hub is a major contributor to the inertia [ph] from buyers on long-term commitments.

Although we are unable to give additional guidance on new long-term sale at this time, our Henry Hub linked LNG continues to represent the cost competitive and reliable source of new supply for buyers providing them with highly desirable index diversification and destination flexibility. So we remain confident, we are well placed to meet additional term sales. In particular our growing buyer relationships and the speed to market and the cost advantages provided by the expansion of our existing projects our key competitive advantages we seek to leverage. In addition, despite the recent headwinds as Jack mentioned policy priorities domestically and in key LNG demand markets are supportive of our optimism on continued LNG demand growth and our ability to continue commercialize liquefaction capacity at our sites. With that I will now turn the call over to Michael who will our financial results.

Michael Wortley: Thank you, Anatol and good morning, everybody. I am pleased to announce our financial results for the second quarter 2017, a summary of which begins on slide 13. We continued to be pleased with the progress of our financial results as we ramp up operations at Sabine Pass and our result year-to-date have let us to increase and tighten the guidance range for adjusted EBITDA for full year 2017 from $1.4 billion to $1.7 billion up to $1.6 billion to $1.8 billion. As Jack mentioned the guidance increase is driven primarily by trains entering service earlier than anticipated and LNG production levels ramping up faster than we forecast earlier this year. As a reminder, as we go through the financial results Cheniere Energy consolidates the results of CQP and CQH.

For the second quarter 2017, we reported consolidated revenue of $1.2 billion, compared to $177 million in the second quarter 2016. We exported 48 cargos from Sabine Pass during the quarter, none of which were commissioning cargos. 23 of those 48 cargos were lifted by a third party SPA customers and 25 were lifted by our marketing function. On a volume basis, during the second quarter we recognized revenue on approximately 160 TBtu produced at Sabine Pass. The settle consist of 167 TBtu loaded during the current period less 14 TBtu sold on a delivered DES basis which were still in transit at the end of the period plus 7 TBtu loaded during the prior period, which was delivered and recognized during the current period.

These volumes exclude any cargos sold by our marketing function that were sourced from third parties. Consolidated adjusted EBITDA for the second quarter 2017 was $371 million compared to a loss of $4 million in the second quarter of 2016, primarily driven by the continued start-up of operations at Sabine Pass. We had three trains in operation in second quarter 2017 where the first train was placed in service midway through the second quarter 2016. Total operating costs and expenses increased $714 million for second quarter 2017 as compared to second quarter 2016, primarily as a result of additional trains in operation between the period. Cost of sales, operating and maintenance expense and depreciation and amortization expense all increased in the current quarter compared to the comparable 2016 period due to our continued ramp up of operations at Sabine Pass.

These increases were partially offset by a decrease in SG&A expense, which was 15% lower in second quarter 2017 as compared to second quarter 2016, primarily due to efficiencies resulting from the organizational changes completed in the first quarter 2017. SG&A expenses for the second quarter 2017 includes $13 million of share-based compensation expenses. Net loss attributable to common stockholders for second quarter 2017 was $285 million or $1.23 per share compared to a net loss of $298 million or $1.31 per share for second quarter 2016. The net loss for the quarter was reduced by an increase in net income attributable to non-controlling interest, which increased by $343 million for the second quarter 2017 compared to second quarter 2016. The majority of the increase in loss $292 million is the non-cash item attributable to amortization of the beneficial conversion feature on Cheniere Partners Class B units.

When the Class B units were originally issued they were done so at a discount to the market price of CQP. This discount represents the beneficial conversion feature, which Cheniere Partners amortizes through the conversion date. We anticipate amortization of the beneficial conversion feature on Cheniere Partners Class B units to have an impact of approximately $370 million on income attributable to non-controlling interest for the third quarter 2017. But no additional impact in later period as the Class B units converted to common units earlier this month. Please turn to slide 14 for recent finance highlights and revise 2017 EBITDA guidance range.

In May Corpus Christi Holdings issued $1.5 billion principal amount of senior secured notes due 2027, which priced at par to yield 5.125%. Net proceeds of the notes were used to reduce outstanding borrowings under the Corpus Christi credit facility. This was our third bond transaction at Corpus Christi and there's now approximately $4.6 billion remaining on the Corpus Bank facility due 2022. We plan to continue to be opportunistic in terming out bank capacity into the bond market as part of our strategy to manage the debt maturity profiles across the company. Also in May Moody's upgraded SPL senior secured debt rating to be Baa3 an investment grade rating.

With that upgrade SPL is now rated investment grade by all three credit rating agencies. As you know investment grade ratings benefit the project in terms of both borrowing costs and operations. We structure our financings with investment grade credit metrics from the outset and are pleased to see the rating agencies recognizing the execution and de-risking achieved to-date. Finally as a result, a strong year-to-date result and increased visibility into second half 2017, today we're raising and tightening our full year 2017 consolidated adjusted EBITDA guidance. Our revised 2017 full year guidance range for consolidated adjusted EBITDA is $1.6 billion to $1.8 billion, which again is due primarily to trains entering service earlier than anticipated and LNG production levels ramping up faster than our earlier forecast.

Guidance is unchanged for distributable cash flow at $0.5 billion to $0.7 billion and distributable cash flow per share of $2.10 to $2.80 per share. Thank you for your time today and for your interest in Cheniere. Operator, we're now ready to open the line for questions.

Operator: [Operator Instructions] Let's take our first question from the Jeremy Tonet with JP Morgan. JeremyTonet: Good morning.

JackFusco: Good morning, Jeremy. JeremyTonet: There has been some news articles out there regarding GAIL and possibly looking to renegotiate some of their contracts with you and spend topical in the marketplace. So I was wondering if you could share your thoughts regarding this. JackFusco: Sure Jeremy. This is Jack.

So, I will start and I will let Anatol if he has anything to add. First off I want all of our customers could be successful and especially want them to recognize that Cheniere delivers a product that is of high quality, it's affordable, it's reliable and it provides them with a lot of optionality to manage their portfolio by not having a destination cost. So, secondly I would say India and specifically GAIL are extremely to Cheniere, as you know India its appetite for LNG has been growing dramatically and we view GAIL as a long-term customer and that a 20 year SPA is just the beginning of our relationship. And then, thirdly I would say Cheniere intends to meet all of our contractual obligations, we intend to meet all of our commitments I have said that over the across of the year now that we intent to meet our commitments with our regulators, our stakeholders, our shareholders. And in return, we expect our customers to meet all of their obligations and their commitments to Cheniere.

So that's I will let Anatol if you have anything more to add. AnatolFeygin: Jack, thank you. We do think that India is a rapidly growing market. It is making a lot of right decisions and investments to increase the gas portion of its energy mix. And they think that U.S.

and Sabine Pass LNG will be a key contributor to balancing their market and provide as Jack said a very attractive components to GAIL and India's portfolio overall. JeremyTonet: Thanks for that. Second question, just want to touch on the marketing aspect of the business came in - had a quite nice quarter better than we expected and was wondering if you could talk more there maybe, we saw our cargos going to Mexico, South America if there is different opportunities that you see there? And do you have any ability to kind of hedge or lock-in on forward-basis any arms that you guys are seeing on the marketing side further in the year?
AnatolFeygin: Yes Jeremy this is Anatol again. Yes, I would say to your point of overall the market has remained resilient again the statistics that we have now delivered to 24 countries. I will say that if somebody said to me a year ago that Latin America will be the plurality of our deliveries, I would not have guessed that especially the mix in Latin America.

They just go to show the advantage and the flexibility of this business model and this product that it rapidly response to market conditions. As Jack said, we've talked about price elasticity of demand and how pleasantly surprised we have been with that globally. Latin America is one of those markets as constraints surface whether that is in LATAM, Asia and Europe. Our product is able to respond to that and capture those premium prices. We touched on that a little bit and saying that less than 15% of our volumes have gone to what the world looks at as the balancing market of Northern Europe.

In terms of hedging and locking in spreads you know that we do look to short and medium term deals like the transactions we entered into in Asia that they do secure some level of margin once we are confident that we will have the cargos to deliver against those. So we do look to that and do take those opportunities off the table when we can. JeremyTonet: Great, thanks for taking my question.

Operator: And we'll take our next question from Christine Cho with Barclays. ChristineCho: Good morning, everyone.

We've seen one of your existing customers publically say that they'd like more LNG supply and are contemplating taking more capacity, but are also evaluating other projects. What do you sense is the most important factor in determining, which way they go, is it completely cost of the supply, execution track record, diversity of the gas? And do any of the customers you talk to want an equity stake in the Train and is it something that you're even open to?
AnatolFeygin: Well, thanks Christine, this is Anatol I'll take the first part and ask Michael to help out on the second. Really all of the above it is a global market, it's becoming complex, liquid, it presents lots of opportunities but in a very dynamic fashion. So we are engage as you can imagine with all of the potential counter parties we think and they ask run the gamut. So it is unquestionably a response to the flexibility that our business and our business model has bought to a table there is no doubt that the destination flexibility something that our customers covered and the ability of Cheniere to perform.

As Jack mentioned over last year given what the team has delivered that box has been checked in speed. So that security and supply, reliability, diversity and of course by sensitivity and contract structure are all key topics and are all addressed in our discussions. In terms of investment it is something that does come up from time to time. Michael, do you want to say a few words on that?
MichaelWortley: Sure. Historically one of the key tenants of our business has been to not take partners out of the project although it's given us a whole lot of flexibility to run the business.

With just people in this room, instead of having to deal with a bunch of partners like some of our competition I said to deal with. So I think our preference would be no, and especially now given the cash flow we're going to be generating, and really efficiently fund these things with on balance sheet debt and lots and lots of cash flow. And having said all of that a very, very large strategic customer came to us and was willing to underwrite off take very large quantities and wanted to look at on equity stage, of course we would consider it the numbers would have to make sense for us though. ChristineCho: Okay. And then I don't know how easy this is to parse out, but can you give us an idea of how much of your marketing contribution year-to-date came from lifting third party volumes and doing displacement and things like that?
AnatolFeygin: Thanks, Christine.

It's not a number that we want to share clearly there is an optimization function that the team performs and that does capture some incremental value whether that is through diversions or shipping optimization. It is I would say at this point relative to our financials, it's not a huge number, but Michael do you want to add to that?
MichaelWortley: Christine, I just point to the back of our Q, we have a volume table in there that shows how much volume is lifted by third party customers, how much was lifted by our marketing affiliate and then how much our marketing affiliate procured from third parties. So I would just look at that. ChristineCho: Okay, thank you.

Operator: And we'll take our next question from Alex Kania with Wolfe Research.

AlexKania: Thanks, good morning. A couple of questions, first is just on the Qatar announcement about them really trying to ramp-up their capacity into the next decade is that a kind of changed discussions or impact to the discussions on long-term deals and are off takers still very focused on the kind of mid-'18 kind of trigger point how to make sure that supply comes online in the 2021-2022 timeframe?
AnatolFeygin: Again this is Anatol, thanks for your question. The Qataris lifting the moratorium and reentering the market of course is a meaningful dynamic in the world of LNG they are very capable competitor, they're reliable supplier and as everyone knows their upstream economics are very attractive. So whatever it worth we think that of the roughly 23 million tones that they've talked about something in the 10 million to 15 million tones is relatively low hanging fruit and debottlenecking and that come online over the next three, four years any incremental capacity would be coming online beyond that. But one of the things that we've been discussing over last year is again the growth of the LNG market and the incremental demand for this product at a reasonable price, which Cheniere and Qatar can meet and can continue to deliver to the market.

And the gap that opens up once you get into early next decade right because demand is much more difficult for handicap supply. These are large visible projects and what is absolute clear is that early next decade very, very little incremental liquefaction will be coming to market. The only companies and entities that will be able to respond to that in relatively rapid fashion are players like Qatar and like Cheniere with our brownfield expansion. So we think the market will continue to grow and as we roll out to the middle and the latter parts of next decade the incremental demand is 120 million, 130 million tones that we don't see being met other than by incremental volumes from Qatar and some of the other low cost suppliers. So we think they are incredible competitor and we think the market will have to absorb their volumes and ours as we continue to grow.

AlexKania: Great, thanks. And just my other question is just on the Class B conversion at CQP last week just any latest thoughts on conversations or anything like that with Blackstone over potential plans that they might have?
JackFusco: With regard to Blackstone I mean you got to ask them what their plans are. We've said time and time again that we entertain structural simplification if it made sense for us, but I guess I would leave it at that. AlexKania: Great, thank you very much.

Operator: We'll take our next question from Ted Durbin with Goldman Sachs.

TedDurbin: Thanks. Maybe I can start with sort of the market again and there's a lot of chatter around lot of heads of agreements being signed included by some of your competitors. I guess, I wonder if you could just comment on those and how much of those might actually translated in SPAs. AnatolFeygin: It's Anatol again, we are as you can appreciate in discussions with related counterparties and to some extent as we navigate the world HOAs are kind of part and parcel of doing business and our steps that may reach to further discussions. And in some cases are almost required to advance those discussions.

So we're not against entering into HOAs kind of as a concept whether they reach to contracts ultimately depends on all of the issues we've discussed on this call and others are you able to meet the requirements and compute effectively for that customer business. So we think we will be, we think we'll get more than our fair share of the market and in some cases HOAs will be part of those discussions. But ultimately it will come down to ability to execute and deliver on the dimensions that are critical for that term supply to the customer. TedDurbin: I guess have you entered any yet or is there a number that you could put on that or is it just something you're considering?
AnatolFeygin: To the extent, we will consider them to the extent that we need to enter them as a means to advance discussions again we would to the extent that they would be for a material volumes we will most likely let you know when that happens. JackFusco: Ted it's linked to what Anatol said I mean we tend to kind of approach the market quietly.

So we would rather execute on our construction plans, build our trains, process the LNG, shift the LNG to variety of different countries and customers and get them comfortable with our product rather than have any type of ceremonies for HOAs or MOUs or anything of that nature. So I would rather go straight into negotiation on SPA than spend a lot of time with HOAs or MOUs that's just my own personal preference. TedDurbin: Understood. And then just on the contracting again at the Analyst Day you spoke about maybe taking on shorter tenure contracts call in the three, seven, ten year range is that still where the market is you think? And kind of where is the demand for that type of contracts versus the traditional 20 years deals?
JackFusco: We're fortunate that we have the flexibility of having volumes in the Cheniere marketing portfolio that we have great degree of freedom in. You've seen us entering shorter term contracts for those volumes, already we continue to entertain those and support our customers with their short and medium term needs.

Just like for the long-term discussions, which I would put anything between 10 and 20 years just to calibrate in that long-term bucket. We do have good appetite from counter parties for medium-term three, five, seven year deals and we're in discussions on those as well. Whether those ultimately form part of the portfolio that underwrites incremental liquefaction again served out of the Cheniere marketing portfolio that depends on mirrored factories. So just with we are engaged kind of along the duration curve with our counter parties and have the flexibility to support them with short, medium and long-term deals. TedDurbin: Okay.

Great. I'll leave it at that. Thank you. JackFusco: Thank you.

Operator: We'll take our next question from Craig Shere with Tuohy Brothers.

CraigShere: Good morning. JackFusco: Good morning. CraigShere: Are you still on pace for above nine delivered cargos a quarter for the legacy Asian pre-sold volumes through the next year?
MichaelWortley: Yeah. Let me just give you this update. I figured somebody would ask that.

So, we've always said we had 42 legacy cargos, we're about 60% through that program. So about 17 cargos left and about 80% of that 17 will be delivered over the second half of this year and then the balance in Q1 '18 and I think ratable probably as good as function as any. CraigShere: Great. And appreciate that Michael and look forward to seeing you tomorrow. And Anatol I wonder if you could just comment about or maybe I don't know if Michael wants to.

This discussion about three, five, seven year contracts maybe more off takers are interested in foreign benchmarks. Just wondering how this all translates into the ability to project finance new projects. Now, I know you guys are in the better position than a lot of your peers in terms of the cash flow and being the first mover. But maybe you could speak to what you see in the market in terms of the tugs between off taker interest and what it really takes to finance the new project?
MichaelWortley: I will start and then turn it over to Anatol. I mean we won't be constrained by the project finance market at all.

We'll do the right deals for the company and we don't need the project finance market to finance them. Now we may go to that market, but it's not a constrained of ours anymore. So in terms of the deals, you want to cover that?
AnatolFeygin: Sure. Again Craig, we - as Michael said we have flexibility to support the customers' requirements and as they deal through their evolving markets and uncertainty we bring a lot to the table. We bring destination flexibility, we bring the liquefaction from the upstream resource we at Cheniere have the capability to support them with those short and medium-term is again they work through there issues.

We believe that to-date - year-to-date no contract that has been entered into support incremental liquefaction. So to the extent that as Michael said we have degrees of freedom that some other players do not have and need more term, and need more the right pricing structures. We have the capability to offer dimensions of support to our off takers that we believe some of the others could not. CraigShere: Right. And last question and so I think on the first quarter call coming what was the some really robust margins are you somewhat sober about the outlook to the rest of the year and into '18 obviously with the fall off of the winter season and then a lot of supply coming on.

We are seeing more and more projects including I believe competing U.S. project getting delayed the latest announcement I think was pushed out at least half a year. Are you getting in any respect more optimistic than how you felt with the first quarter comments?
AnatolFeygin: Yes thanks Greg. I am the - uncharacteristically I would say the optimist in this shop and as you look at the forecast that the pundits put out a year ago, two years ago, '16 was supposed to be sloppy, '17 was supposed to be sloppy and I think as you and I discussed we got a sort of advanced peak at what the winter of '16-17 was going to look like when we participated in some market activity that crude much stronger than we expected. Now the winter went on to be even stronger than that and I think surprised a lot of new players in the market, but you had to - as you work through that you had to say that the shoulder period was going to have more supply coming on that we've seen this 15 million ton number in the first half and seasonally just less demand.

That said we have been pleasantly surprised by the strength in the market, the kind of margins we are seeing, the optimization opportunities we are seeing. And as we set here today with Henry well under $3, we have six channels in Asia and the Contango in the market. So, yes we are clearly more optimistic than I would say even we were in Q1 and as Jack mentioned and we've talked about in the past demand is continues to surprise us with how price elastic it is given this $6 and $7 price signal. CraigShere: Great, thank you.

Operator: And as a reminder, please limit your questions to one and one follow up.

We will take our next questions from Michael Webber with Wells Fargo. MichaelWebber: Hey, good

morning
JackFusco: Good. Michael, how are you?
MichaelWebber: Good. Jack first I wanted to circle back to incremental off take and kind of where the markets at, you guys already talked a bit about flexible destination causes and direct equity investments and lots of other I guess bells and vessels some of which are I guess the fact suspect and right now it's in the market but you have got a number of other competitors that are probably going to be more reliant on those when you guys would necessarily have to be I guess particularly kind of U.S. second wave projects.

But if we going to push those to the side and just kind of look at kind of purely look at where the clearing prices right now for marginal off take. Do you think it's gotten more competitive quarter-on-quarter since some of those U.S. second wave projects have gotten more active? And are you saying more marketing done below where you're break even or your hurdle rate would be for something like Corpus 3?
JackFusco: I have to tell you. We are working Corpus 3. First off there is only one thing on my white board in my office of things to do and that one thing is FIDCC 3.

So, we are totally 100% focused on growing the business we think Corpus 3 should be the next logical train that gets built in the United States full stop for incremental LNG. I also think we are in the best position all the way around with all the existing infrastructure that we've invested in with our people, with our processes that we have and the fact that we can actually deliver DES. So, it's not a toll, I have said this before I'd like to touch every part of the LNG value chain and then we have pennies and nickels out of each part and when you added all up it's a pretty big number. And we have joke around here Michael that we feel like farmers, because we are in a volume business we are generating large quantities of volume, margins are good but not great and it's a good business but it's not a great business to fund new greenfield projects, but we don't need that. The customers have been very confused I would say over the last year that I have been around on who to believe? So there has been a lot of rhetoric especially from the U.S.

greenfield LNG participants about how cheaply they can do it. It hasn't panned out. So, I think you're on starting to see I know I am starting to see our customers have much more thoughtful discussions with us about what's achievable for a reliable supply of LNG delivered to [indiscernible]. So I feel when I am like - I feel much more optimistic about our ability to grow this business than I was a year ago. In the conversations are much more relevant pointed about what they need to make a commitment to Cheniere.

MichaelWebber: Right I guess the question would be what impact - what lasting impact if any have U.S. second wave projects had on that kind of the declaring price that announced sitting down to talk your customers about has that confusion led to any sort of degradation in pricing?
JackFusco: No I would say we're not going to chase it down market, we're not going to make an investment that doesn't make sense for our shareholders. And I think it will move like - and we have the most competitive project from a capital perspective in U.S. right now with Corpus 3. So I think the market will rotate back to us.

I don't know Anatol you have anything to add to that. AnatolFeygin: Yes thanks, Jack, thanks Michael. I think Jack said probably two years ago, there was a lot of activity that was based on kind of advertise numbers and presentations that as those customers that you mentioned dealt further into they figured out that those numbers were unachievable or at least unachievable reliably. And I would say, it's hard to answer your answer specifically because there has not been kind of market clearing activity that we can point to, but certainly there is a much more or much higher level of sophistication information. And I'd say that to the extent that we do take a guess at what the market is it has moved up pretty substantially from those kind of advertised numbers that the people were throwing around 18 months ago.

MichaelWebber: Got you, that's helpful. Just as my second question, I wanted to loop back to I think actually in earlier question around sourcing third-party LNG volumes, but Mike I believe you called out the table in the back of the K in terms of the volumes going to be used I guess to cover CMI contracted volumes as oppose using excess being capacity. The 15 TBtu kind of listed there the pretty healthy jump quarter-on-quarter. So, I am just hoping can you put that figure in context for us, is that something you think you would sustain through the balance for the year and into 2018? And then you talked about a bit earlier just the thought process that goes into that whether it's primarily around to optimizing or is it you're obviously keeping cash upstairs by doing that. So curious how much that weighs on that decision?
MichaelWortley: Yes, it's like Jack said it's really taking what the market gives you.

So, it's really totally unpredictable, but the marketing folks have set up the short positions in Asia and occasionally you can source that cargo in Asia free up our cargo in the Atlantic Basin and fill it locally basically. And make good margin doing that, but it's really tough to predict. So, I can't answer your question now, but I think it's something we can think about going forward I think it's going to be quite unpredictable. MichaelWebber: Okay, thanks for the time guys. MichaelWortley: Thank you.

Operator: We'll take our next question from Matthew Phillips with Guggenheim. MatthewPhillips: Just circling back to GAIL for a second, have they approached you directly about renegotiations on the SPA or just all being done via media at this point?
JackFusco: Yes, thank you, Mathew. I talk to all my customers all the time, earlier this summer I did a trip to Europe and met with most of the foundation customers, and I just think it's good business. So - but as I said before a contract is a contract and that's been our position with all of our customers. MatthewPhillips: Got it.

When do you expect commercial data - first commercial delivery on trend for?
JackFusco: Yes, March. Yes, March 1 is the DFCD date is what you mean for…
MatthewPhillips: March 1. Okay, got it. And then big picture I mean, I think the Korean Energy reforms took the market by surprise I mean, is it way too early to tell if you have visibility to new off-take here I mean have there been reports of a tender coming at any point this year I mean what is kind of the general view there?
AnatolFeygin: Thanks Matt this is Anatol and the rest of the team will pinch in. It is a pretty large seismic shift with one of the largest LNG buyers in the market today.

The administration there as you know is new, the changes to policy are relatively new, they're very encouraging and the combination of the new administration and the commencement of ours happen to coincide. So we had a wonderful opportunity to host the delegations at Sabine Pass in the United States and we have very good relationship it's a start of a 20 year - at least 20 year marriage and we hope to continue to grow our opportunity to supply South Korea. So we're very optimistic and we think that this is one of the many tailwinds - policy tailwinds that Jack talked about in his opening remarks. MatthewPhillips: Okay, great. That's all from me.

Operator: Next we have James Carreker with U.S. Capital Advisors. JamesCarreker: Hi, thanks. I was wondering if you guys might be able to bridge the gap a little bit on Q1 versus Q2 EBITDA at CQP. You had an additional train in service, but EBITDA was down I was wondering if you might talk about what some of those offsets were?
MichaelWortley: Yes sure this is Michael.

I'll talk broadly maybe more about CEI and the same things are impacting CQP. But we had volume up substantially right quarter-on-quarter our marketing business basically had the volumes from Train 3 almost the entire quarter until KOGAS started there at the end. So volume was way up, but margin was way down we are talking about sort of mid-3 margins in Q1 and more like low dollar type margins in Q2. So that impacted it. Those are really the two main things, more volume, much less margins and that effect CEI and CQP.

JamesCarreker: Okay. So it's really just a function of global prices?
MichaelWortley: Absolutely. AnatolFeygin: Global price another fact that the term off-takes had not commenced. So we have CQP had a lot more exposure to that. As I said on the last call 2017 is the year of heightened exposure to the spot market just because our marketing teams have control over the trains when they start until DFCD have the contract.

And so we just got through that on Train 3, we'll have it on Train 4 again through the winter similarly. JamesCarreker: So does that mean that when I guess Train 3 before it was substantially complete I guess or before DFCD does the economics belong to I guess CEI at that point?
AnatolFeygin: Yes, marketing the volumes and sharing those margins with CQP. JamesCarreker: Okay. And then any update on remaining CapEx spend at Sabine Pass getting pretty close to commissioning Train 4? And any thoughts on what you do maybe with that kind of contingency CapEx that you've been holding back?
MichaelWortley: No change in the contingency for now, the Train 5 is still 18 months out roughly. And so we'll let that progress more before we start making decisions on contingency.

But we have about $3.1 billion of capital remaining. Again mostly associated with Train 5 and then Corpus is about $4 billion if you're wondering about that project. JamesCarreker: That's all from me, thank you.

Operator: We'll take our next question from Fotis Giannakoulis with Morgan Stanley. FotisGiannakoulis: Yes hi gentlemen.

Anatol I want to ask you if you have any update about the modular LNG feed and if you can provide us with any update about the Chilean project?
AnatolFeygin: Thanks Fotis. Yes as you said we're continuing to work through the feed as we said before we are still cautiously optimistic our work there is not done yet, but we think it is a viable option and another arrow in Cheniere quiver that will allow us to continue to be the low cost and most responsive incremental liquefaction supplier in U.S. As Jack mentioned the branch of expansions of Corpus Train 3, Sabine Train 6 are the most attractive economics and we're going to work very hard to continue to maintain that kind of competitive posture. But we're not done yet we're not fully through the feed process there, yet but again optimistic there. Yes, in terms of Chile, yes we continue to work with our partners on our El Campesino.

As you know the permitting process has resumed, we're working through the indigenous consultation, we have a very valuable power purchase agreement and a fully permitted power plant and we're going to work alongside our partners to capture that value and remain cautiously optimistic about that as well. FotisGiannakoulis: Thank you, Anatol. And to follow-up on the previous questions about incremental off-takes particularly from the U.S. and your comment about your demand elasticity the price elasticity of demand, how fast do you think that the demand can grow at LNG prices that are higher than today and they can support this new projects, this expansion projects?
JackFusco: Great question Fotis. I wish we knew the answer to that, right.

This is a period where the market is clearly demonstrating that between kind of $5.5 and $7. There is a tremendous amount of demand in the market depending where you get those kind of $7 or maybe $8 numbers, will determine whether that is sufficient at call $4 to $3 Henry Hub to underwrite more liquefaction or not. I think the market is positioning itself for more term off-take, but it is in the period of digesting a very substantial incremental wave of supply. And again since supply is a lot easier to handicap all of these buyers who listen to us, who listen to all of our extreme competitors and all of the consultants see this wave coming over the next couple of years. I would say, to your question and previous questions.

I think by and large the market is surprised how quickly this incremental volume is being digested. So what was - whatever peoples' guess was for the point at which the market rebounces must have moved up relative to their initial expectations in 2015-16. And we think with that the buyer appetite and appetite for meaningful term commitments will come back and will come back soon rather the later. So whether that what the global growth rate for LNG is against the new policy backdrops that you're seeing as we discussed out of South Korea, out of China, out of Vietnam, out of other countries. And how does that respond to a price signal that's sufficient for incremental liquefaction projects.

We are optimistic about that, but that point in the cycle is yet to come. FotisGiannakoulis: Thank you. Anatol will appreciate. Thank you, Jack. JackFusco: Okay, Fotis.

Operator: We'll take our next question from Pavel Molchanov with Raymond James. Please go ahead. PavelMolchanov: Thanks for taking the question guys. Just one question from me. You alluded to the recent decision to cancel one of the largest proposed projects in the United State or Canada rather.

And yet there is still more than 60 Bcf a day of projects in the pipeline when we add up what's proposed in the U.S. as well as DC. So my question is, why do you think the pace of cancellation has been so slow bearing in mind all the contracting difficulties that you've been discussing?
JackFusco: I am not really sure for Pavel other than it just doesn't cost much to keep it alive, right. And hopefully there is a big part to go at the end if you are successful. So, why I drive that out and try to keep it alive for as long as you possibly can.

PavelMolchanov: Is the fact that there are all these projects that are kind of in limbo is that actually creating a worst supply demand balance? When there is the 60 Bcf a day potential supply overhang over the market. JackFusco: No I don't think so, I mean it's not the sense that I get from our customers myself the customers want to deal with the reputable company that has proven execution that can deliver reliable supply at affordable price. And I don't sense that there is any concern there with them waiting to see what happens with other folks and I am looking at Anatol. AnatolFeygin: Yes, thanks Jack. I'll just add a couple of things to Jack's point.

I think the market is starting to also understand the integrated business model that Cheniere brings to the table as oppose to the challenges inherent in the total construct for the capacity holders. And with that as the market becomes more sophisticated and keep in mind again the market did not have U.S. LNG before February 24th of last year. So this is kind of a new dynamic and everyone is getting smarter on what it means and what the challenges of supplying LNG from these projects means. In terms of buyer appetite again while those projects between the market digesting this incremental supply and in some cases projects advertising numbers that I think at this point the buyers are realizing unrealistic or at least include a lot more cost than just the advertise number.

I think that that competition is going to fall by the way side closer than it has over the last year and half. PavelMolchanov: Appreciate again.

Operator: We will take our next question from Jean Ann Salisbury with Bernstein. JeanAnnSalisbury: Good morning. Separately from the true supply demand balancing in the early 2020.

There was the 90 MPA of recontracting demand from 2020 to '25 that you showed at your Analyst Day. Are buyers already in the market for resigning or replacing these volumes or will that be more like 2018, 2019?
JackFusco: Well they are absolutely the market, again these are 20 year deals in most cases that are rolling off and absolutely the discussions are well underway with that wedge of the market. I would say that that wedge you can prove the subdivide into suppliers that are less long than they were either that's because of indigenous demand growth or resource constraints. And suppliers that have those volumes to market obviously the first bucket is easier to address and compete than the second and we're in discussions with all of those off takers for that next term commitment. JeanAnnSalisbury: Got it, thank you.

And then as a follow-up Cheniere trade at a fairly correlation to oil price. How do you think about the fundamental betas to oil price that Cheniere should have?
JackFusco: We think it should be zero. JeanAnnSalisbury: When oil price goes up it should be good for you to be able to summer volumes because they are competing price I guess has gone up as well, is that fair?
JackFusco: Well you are right, but in that you are making the assumption that going forward LNG prices will be oil linked and we think that that's a premise that's going to continue to be challenged going forward. JeanAnnSalisbury: Okay, thanks a lot.

Operator: And that does conclude today's question-and-answer session, I would like to turn the conference back over to Jack Fusco for any additional or closing remarks.

Jack Fusco: Yes I just want to say thank you everybody for your support of Cheniere and for what we are trying to do here and we really appreciated and talk to you soon.

Operator: And once again that concludes today's presentation. We thank you all for your participation and you may now disconnect.