Cheniere Raises Earnings Guidance for 2017 as LNG Exports Grow

Researched by Industrial Info Resources (Sugar Land, Texas)--Cheniere Energy Incorporated (NYSE:LNG) (Houston, Texas) reported on Tuesday a net loss of $285 million for the second quarter of this year, compared with a net loss of $298 million for the same period a year earlier, but raised its earnings guidance for 2017 amid growing liquefied natural gas (LNG) exports. Year to date, LNG from Cheniere's Sabine Pass liquefaction facility and terminal in Cameron, Louisiana, has been delivered to 10 new countries. As of July, LNG from Sabine Pass has reached 24 of the 40 LNG-importing countries around the world.

First LNG from Cheniere's $2.5 billion Train 4 at Sabine Pass was achieved in July, the company reported. The 4.5 million-ton-per-year train is expected to be fully in service by the end of the year. Cheniere is developing up to six trains at Sabine Pass, each with a nominal production of 4.5 million tons per year. Train 5 is under construction, and Train 6 is being commercialized and has regulatory approvals, Cheniere said. For more information on Train 4, see Industrial Info's project report.

Industrial Info is tracking 19 active Cheniere projects worth more than $38 billion.

At Corpus Christi, Texas, Cheniere is developing up to three liquefaction trains, each with a nominal production capacity of 4.5 million tons per year. Trains 1 and 2 are under construction, and Train 3 is being commercialized and has regulatory approvals. Two additional trains are in development next to the Corpus Christi site, Cheniere said. For more information, see Industrial Info's project reports for Train 1, Train 2, and Train 3. For related information, see June 27, 2017, article - Cheniere Energy: Corpus Christi LNG Terminal 65.6% Complete.

The proliferation of LNG export projects across North America has led market analysts to question how quickly LNG can be absorbed by the current market, and how many projects will fall out due to market conditions. In July, Malaysian company Petroliam Nasional Berhad (Petronas) announced the cancellation of the massive Pacific Northwest LNG project in British Columbia, citing current market conditions. For related information, see July 26, 2017, article - Developers Cancel Pacific NorthWest LNG Project, Future of Related Pipeline in Question.

Cheniere Chief Executive Officer Jack Fusco said in the company's earnings statement that the second quarter was highlighted by the commencement of a 20-year LNG supply contract with Korea Gas Corporation (KOGAS) (Seoul, South Korea). Cheniere will sell and make available for delivery to KOGAS approximately 3.5 million tons of LNG per year, which represents more than 10% of South Korea's total annual demand.

"We are revising our 2017 guidance upward as our operating results year-to-date have exceeded our expectations, primarily due to LNG trains entering service ahead of schedule and the ramp-up in LNG production levels occurring faster than we'd forecast earlier this year," Fusco said in a press statement. "During the second half of 2017, our focus remains on bringing Train 4 at Sabine Pass online safely and efficiently, executing on our commercialization strategies, and delivering on our increased 2017 guidance."

In May, Cheniere reported first-quarter 2017 earnings of $54 million, compared with a $321 million loss in first-quarter 2016. For more information, see May 5, 2017, article - Cheniere Sees $267 Million Positive Swing in First-Quarter 2017.

In related news, the U.S. exported more natural gas than it imported in February, April and May of 2017, according to the Energy Information Administration. On an average annual basis, the U.S. has been a net natural gas importer for nearly 60 years.

Declining net pipeline imports from Canada, growing natural gas pipeline exports to Mexico and increasing exports of liquefied natural gas (LNG) are all contributing to the nation's ongoing shift toward being a net exporter. While the U.S. remains a net importer of natural gas from Canada, U.S. exports to eastern Canada have been increasing steadily since 2000.

Since 2011, several pipeline reversals have contributed to the growing volume of natural gas delivered into Canada from both the Midwest and Northeast. In March, total U.S. natural gas exports to Canada were 3.21 billion cubic feet per day (Bcf/d), near the monthly record of 3.25 Bcf/d reached in December 2012; U.S. exports to Canada declined in both April and May.

U.S. natural gas exports to Mexico also reached near-record levels in the first five months of 2017, averaging 4.04 Bcf/d, according to the EIA.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.