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Released August 09, 2024 | SUGAR LAND
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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Low natural gas prices and a flooded market were partially to blame for the 21% sequential loss in revenue during the second quarter, Cheniere Energy Incorporated (Houston, Texas) said Thursday.
During the three-month period ending June 30, Cheniere saw a combined 155 ships laden with liquefied natural gas (LNG) taken from its Sabine Pass and Corpus Christi export facilities. That's 4% higher than year-ago levels.
Both terminals are among the busiest in the United States. During the seven-day period ending July 31, the U.S. Energy Department showed 24 total vessels departing with LNG on board. Of those, seven left from Sabine Pass and four left from Corpus Christi.
Federal U.S. data show total exports averaged 11.9 billion cubic feet per day (Bcf/d) last year, a 12% increase from the previous year. That made the United States the global leader in LNG exports.
Australia and Qatar, the next closest exporters, both sent out around 10 Bcf/d last year. Russia and Malaysia, two other major exporters, combined for 7.7 Bcf/d in 2023.
It was the former, Russia, that prompted a sea change in the global gas market when it invaded Ukraine in February 2022. Western-backed sanctions have almost erased Russian supplies from Europe, where it was once the main supplier of natural gas, but not before an unprecedented spike in natural gas prices.
Henry Hub, the U.S. benchmark for the price of natural gas, traded as high as $9.43 per million British thermal units (mmBtu) in June 2022. With markets adjusted, and with the United States churning out 12 Bcf/d in LNG this year, the price today is closer to $2.06 per MMBtu.
That helped explain the loss for Cheniere. The company reported net income over the three-month period ending June 30 of $3.2 billion, 21% below year-ago levels. Average U.S. natural gas prices during the second quarter were 3.7% below the same period last year.
Cheniere said that was primarily the reason behind the slump in revenue.
"The decreases were primarily due to moderating international gas prices and the higher proportion of our LNG being sold under long-term contracts, resulting in lower total margins per MMBtu of LNG delivered compared to the prior period," the company said.
LNG remains a sought-after commodity due to its role as a bridge fuel and in energy security. Unlike piped gas, which can carry a geopolitical risk premium due to the transnational agreements necessary for hundred-mile projects, LNG is more fluid in terms of delivery.
Most of the LNG cargo sent from the United States winds up in Europe.
Cheniere, meanwhile, aims to significantly expand its current export capacity through expansions at both Sabine Pass and Corpus Christi. Industrial Info Resources (IIR) sees several new LNG projects slated for the U.S. Gulf Coast. IIR sees a total investment value of around $85 billion for new, high-probability LNG projects in the United States.
Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Production Project Database can click here for a report on the Sabine Pass LNG Train 7 and 8 additions and click here for a list of Corpus Christi project reports.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
During the three-month period ending June 30, Cheniere saw a combined 155 ships laden with liquefied natural gas (LNG) taken from its Sabine Pass and Corpus Christi export facilities. That's 4% higher than year-ago levels.
Both terminals are among the busiest in the United States. During the seven-day period ending July 31, the U.S. Energy Department showed 24 total vessels departing with LNG on board. Of those, seven left from Sabine Pass and four left from Corpus Christi.
Federal U.S. data show total exports averaged 11.9 billion cubic feet per day (Bcf/d) last year, a 12% increase from the previous year. That made the United States the global leader in LNG exports.
Australia and Qatar, the next closest exporters, both sent out around 10 Bcf/d last year. Russia and Malaysia, two other major exporters, combined for 7.7 Bcf/d in 2023.
It was the former, Russia, that prompted a sea change in the global gas market when it invaded Ukraine in February 2022. Western-backed sanctions have almost erased Russian supplies from Europe, where it was once the main supplier of natural gas, but not before an unprecedented spike in natural gas prices.
Henry Hub, the U.S. benchmark for the price of natural gas, traded as high as $9.43 per million British thermal units (mmBtu) in June 2022. With markets adjusted, and with the United States churning out 12 Bcf/d in LNG this year, the price today is closer to $2.06 per MMBtu.
That helped explain the loss for Cheniere. The company reported net income over the three-month period ending June 30 of $3.2 billion, 21% below year-ago levels. Average U.S. natural gas prices during the second quarter were 3.7% below the same period last year.
Cheniere said that was primarily the reason behind the slump in revenue.
"The decreases were primarily due to moderating international gas prices and the higher proportion of our LNG being sold under long-term contracts, resulting in lower total margins per MMBtu of LNG delivered compared to the prior period," the company said.
LNG remains a sought-after commodity due to its role as a bridge fuel and in energy security. Unlike piped gas, which can carry a geopolitical risk premium due to the transnational agreements necessary for hundred-mile projects, LNG is more fluid in terms of delivery.
Most of the LNG cargo sent from the United States winds up in Europe.
Cheniere, meanwhile, aims to significantly expand its current export capacity through expansions at both Sabine Pass and Corpus Christi. Industrial Info Resources (IIR) sees several new LNG projects slated for the U.S. Gulf Coast. IIR sees a total investment value of around $85 billion for new, high-probability LNG projects in the United States.
Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Production Project Database can click here for a report on the Sabine Pass LNG Train 7 and 8 additions and click here for a list of Corpus Christi project reports.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
