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Released September 15, 2021 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Having spent about $30 billion on capital projects to date, liquefied natural gas (LNG) producer and exporter Cheniere Energy (NYSEAmerican:LNG) (Houston, Texas) expects to reach a financial investment decision (FID) next year on what may be its last really big capacity expansion project for the near future.
The company continues to look at building out its capacity as the LNG market tightens. But Cheniere also has reached a "cash flow inflection point" that will allow it to pay off $4 billion in debt and return more to its shareholders through share buybacks and dividends, as part of its "all-of-the-above" long-term capital allocation plan, which was announced last week.
"We are just finishing with a $30 billion construction effort and it's time for us to get our credit metrics under control," Cheniere Chief Executive Officer Jack Fusco told CNBC.
The company expects to reach substantial completion of the Sabine Pass LNG Train #6 addition in Cameron, Louisiana, in first-quarter 2022, bringing the company's total liquefaction capacity to 45 million tons per year, or more than 10% of global capacity, Fusco said during a September 7 conference call with investment analysts. Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Production Project Database can click here for a detailed report on Train #6.
Cheniere also expects to decide next year whether to move forward with its "shovel-ready" Corpus Christi Stage 3 project, which comprises a brownfield expansion of at least 9.5 million tons per year at the Texas site, utilizing as many as seven mid-scale LNG trains. Each of the three large-scale trains now operating at Corpus Christi has a nominal production capacity of 4.5 million tons per year.
"Since our operational excellence and debottlenecking efforts have unlocked an additional 5 million tons of capacity across our existing trains, our marketing and origination teams have been working on executing our midterm strategy, with the goal of getting the entire Cheniere platform to around 90% contracted," Fusco said during the conference call. That goal has been achieved through the mid-2020s (which) allows us to focus on commercialization of Stage 3 Corpus Christi. We expect FID on Corpus Christi next year."
For more information on Corpus Christi Stage 3, see Industrial Info's detailed project report.
On top of all that, additional debottlenecking at the Corpus Christi and Sabine Pass sites could increase capacity by 1-million to 2 million tons per year.
And there's still room to grow at some point in the future, given the right market conditions.
"For future growth we found at Corpus, we have enough real estate, there's enough infrastructure, being built or is built --and I'm talking about natural gas infrastructure --that we could easily add another 20 million tons [of capacity]," Fusco said during the conference call.
The Sabine Pass site has plenty of pipeline infrastructure in place, and construction of a third ship berth for LNG-carrying vessels is ahead of schedule, Fusco said, adding: "There's an opportunity there to not only continue our debottlenecking efforts but to also add additional capacity at Sabine."
Engineering firms Burns & McDonnell (Kansas City, Missouri), T. Baker Smith LLC (Houma, Louisiana), Bechtel Corporation (Reston, Virginia), along with Great Lakes Dredge & Dock Company (Oak Brook, Illinois), are at work on the third berth at Sabine Pass. For more information, see Industrial Info's project report.
Shane Mullins, Industrial Info's vice president of product development, commented: "Just looking at the tightening LNG market, spot prices are at record highs, which have brought buyers back to the table to sign the long-term agreements needed to finance additional liquefaction projects.
"Over 100 MTPA of additional LNG liquefaction capacity will need to be approved by 2025 to meet global demand by 2030 and we certainly see Cheniere's Mid-Scale Stage 3 project along with the additional debottleneck plans they have in meeting that demand forecast."
Mullins and Gordon Gorrie, vice president of research--oil & gas, will discuss related industry spending trends in a free Industrial Info webinar to be held today, September 15, at 10 am CST. Click here to RSVP!
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 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.
The company continues to look at building out its capacity as the LNG market tightens. But Cheniere also has reached a "cash flow inflection point" that will allow it to pay off $4 billion in debt and return more to its shareholders through share buybacks and dividends, as part of its "all-of-the-above" long-term capital allocation plan, which was announced last week.
"We are just finishing with a $30 billion construction effort and it's time for us to get our credit metrics under control," Cheniere Chief Executive Officer Jack Fusco told CNBC.
The company expects to reach substantial completion of the Sabine Pass LNG Train #6 addition in Cameron, Louisiana, in first-quarter 2022, bringing the company's total liquefaction capacity to 45 million tons per year, or more than 10% of global capacity, Fusco said during a September 7 conference call with investment analysts. Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Production Project Database can click here for a detailed report on Train #6.
Cheniere also expects to decide next year whether to move forward with its "shovel-ready" Corpus Christi Stage 3 project, which comprises a brownfield expansion of at least 9.5 million tons per year at the Texas site, utilizing as many as seven mid-scale LNG trains. Each of the three large-scale trains now operating at Corpus Christi has a nominal production capacity of 4.5 million tons per year.
"Since our operational excellence and debottlenecking efforts have unlocked an additional 5 million tons of capacity across our existing trains, our marketing and origination teams have been working on executing our midterm strategy, with the goal of getting the entire Cheniere platform to around 90% contracted," Fusco said during the conference call. That goal has been achieved through the mid-2020s (which) allows us to focus on commercialization of Stage 3 Corpus Christi. We expect FID on Corpus Christi next year."
For more information on Corpus Christi Stage 3, see Industrial Info's detailed project report.
On top of all that, additional debottlenecking at the Corpus Christi and Sabine Pass sites could increase capacity by 1-million to 2 million tons per year.
And there's still room to grow at some point in the future, given the right market conditions.
"For future growth we found at Corpus, we have enough real estate, there's enough infrastructure, being built or is built --and I'm talking about natural gas infrastructure --that we could easily add another 20 million tons [of capacity]," Fusco said during the conference call.
The Sabine Pass site has plenty of pipeline infrastructure in place, and construction of a third ship berth for LNG-carrying vessels is ahead of schedule, Fusco said, adding: "There's an opportunity there to not only continue our debottlenecking efforts but to also add additional capacity at Sabine."
Engineering firms Burns & McDonnell (Kansas City, Missouri), T. Baker Smith LLC (Houma, Louisiana), Bechtel Corporation (Reston, Virginia), along with Great Lakes Dredge & Dock Company (Oak Brook, Illinois), are at work on the third berth at Sabine Pass. For more information, see Industrial Info's project report.
Shane Mullins, Industrial Info's vice president of product development, commented: "Just looking at the tightening LNG market, spot prices are at record highs, which have brought buyers back to the table to sign the long-term agreements needed to finance additional liquefaction projects.
"Over 100 MTPA of additional LNG liquefaction capacity will need to be approved by 2025 to meet global demand by 2030 and we certainly see Cheniere's Mid-Scale Stage 3 project along with the additional debottleneck plans they have in meeting that demand forecast."
Mullins and Gordon Gorrie, vice president of research--oil & gas, will discuss related industry spending trends in a free Industrial Info webinar to be held today, September 15, at 10 am CST. Click here to RSVP!
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 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.
