Page 8 - NorthAmOil Week 32

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Cheniere ups volumes, losses
US
CHENIERE Energy has exported 750 cargoes of LNG since beginning work, the company said in its second-quarter results, announced on August 8. During the recently ended quarter, it exported 104 cargoes, up from 61 in the same period of 2018.
Despite increasing its shipments, the com- pany posted a $114mn loss for the quarter, ver- sus a $18mn loss for the period in 2018. Over the rst half, it reported net income of $27mn, although this was still down on its 2018 num- bers, when it achieved $339mn.
Revenues reached $2.29bn in the second quarter, up 49% year on year on the same period in 2018, when it recorded $1.54bn. Over the rst half, it reported $4.55bn, up by 20% on 2018’s $3.79bn.
Explaining the widening losses in the second quarter, Cheniere noted higher operating costs and expenses and lower LNG prices – in addi- tion to various nancing costs, such as increased interest and a net derivative loss.
In June, the company made clear that it would focus on expanding its capacity over returning cash to shareholders, although with some allow- ances for share buybacks. It also noted it would aim to have at least 50% equity funding in future projects, which it has adopted for Sabine Pass Train 6 and Corpus Christi Stage 3. is latter project may reach a nal investment decision (FID) in 2020.
“ e second quarter was highlighted by con- tinued execution on our growth plans through a positive FID on Train 6 at Sabine Pass, contin- ued commercial innovation with the long-term [integrated production marketing] IPM contract with Apache, and continued nancial discipline, re ected in the capital allocation framework we announced during the quarter,” said Cheniere’s president and CEO, Jack Fusco.
The official noted that higher output had helped to “o set relative so ness in short-term LNG market pricing”.
Train 6 at Sabine Pass is due to be nished in the rst half of 2023, with construction currently 2.1% complete. e other ve trains are already producing.
At Cheniere’s Corpus Christi project, one train is operational, a second is in the process of commissioning and the third is under con- struction. First production from Train 2 was reported in June. Substantial completion is anticipated in the third quarter, while Train 3 at Corpus Christi should start up in the second half of 2021.
e Stage 3 plan at Corpus Christi involves a plan for up to seven midscale trains, which would add around 9.5mn tpy of capacity.
Competition
Tellurian also posted its second-quarter results last week. The company is backed by Charif Souki, who was instrumental in Cheniere’s pro- gress – until being ousted in late 2015 amid a dis- pute with activist investor Carl Icahn.
Where Cheniere has a number of plans underway, Tellurian is still working towards an FID on its Dri wood LNG plan, targeted for this year. During the quarter, Tellurian signed up a $500mn equity investment from Total in the Dri wood LNG plan, in addition to a supply agreement. e facility will have up to 27.6mn tpy of capacity.
Tellurian also said it had completed binding open seasons for a number of pipelines – the Permian Global Access Pipeline (PGAP), the Haynesville Global Access Pipeline (HGAP) and the Delhi Connector Pipeline (DCPL). Pre- ling with the Federal Energy Regulatory Commis- sion (FERC) would begin on the PGAP in the next quarter.
Noting the show of con dence from Total, Tellurian’s president and CEO, Meg Gentle, said the US company had “executed a thorough set of documents and we are using those as a tem- plate to secure further agreements with partners. We are preparing to launch the project nance debt syndication, which we expect [will] take the remainder of the year.” Assuming FID takes place this year, construction could also start, with operations beginning in 2023.
Earlier this year, it was reported that Cheniere was suing Souki, and another colleague at Tel- lurian, over an alleged failure to repay a $46mn loan. Cheniere has said that the Dri wood LNG plan is substantially the same as a project Souki was working on when it employed him. Tellurian has denied the claim.™
Train 6 at Sabine Pass is due to be nished in the rst half of 2023.
Where Cheniere has a number of plans underway, Tellurian is still working towards an FID on its Driftwood LNG plan.
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w w w . N E W S B A S E . c o m Week 32
15•August•2019