Page 8 - GLNG Week 17

GLNG AMERICAS GLNG
Cheniere reports first-quarter profit, but moderates growth forecast
PERFORMANCE
As of April 27, Cheniere has produced, loaded and exported more than 1,100 cumulative LNG cargoes totalling over 75mn tonnes.
CHENIERE Energy, the US’ leading exporter of LNG, reported this week that its net income in the first quarter of 2020 reached $375mn, or $1.43 per share, compared with $141mn, or $0.55 per share, in the same quarter a year ago.
The growth in profits came alongside a rise in the number of cargoes the company shipped from its two terminals on the US Gulf Coast – 128 in the first quarter of 2020 compared with 87 in the first quarter of 2019. Cheniere’s first-quar- ter revenue reached $2.7bn, up 17.3% year on year from $2.3bn.
However, Cheniere warned at the same time that it has experienced an increase in the num- ber of cargo cancellations by its customers in response to market conditions as the coronavi- rus (COVID-19) pandemic continues to weigh on demand. The warning comes as no surprise, given that media have been reporting rising numbers of cancellations affecting cargoes that were due to be loaded in the US in June in recent days. According to Argus Media, the number of cancellations of cargoes from Cheniere’s
terminals may have reached 16.
Under Cheniere’s contracts, buyers that can-
cel cargoes still have to pay a tolling fee. This, combined with the fact that Cheniere’s output is highly contracted, means it does not expect the cancellations to have a material impact on its pre- dicted financial results for the year. The company also said revenue of around $53mn in the first quarter of 2020 was associated with cancelled LNG cargoes.
As of April 27, Cheniere says it has produced, loaded and exported more than 1,100 cumula- tive LNG cargoes totalling over 75mn tonnes.
Cheniere’s CEO, Jack Fusco, described the first quarter as “defined by unprecedented cir- cumstances”, as a result of which the company has moderated its growth projections for LNG exports over the whole of 2020. Cheniere said global demand for LNG had grown by about 10% y/y during the first quarter of 2020, but added that it now expects “to potentially see year-over-year declines in some future quarters” as a result of reduced economic activity and high storage inventory levels.™
NGPL declares force majeure on Sabine Pass gas flows following storms
PIPELINES & TRANSPORT
NATURAL Gas Pipeline Co. of America (NGPL), a subsidiary of Kinder Morgan, said on April 29 that gas transport to the Sabine Pass delivery point was temporarily suspended after “severe” storms damaged the pipeline. Describ- ing the incident as a force majeure event, NGPL said that immediate investigation and repairs were required.
The Sabine Pass facility was the first LNG export terminal to come online in the Lower 48 US states, and has been operating since 2016. Operator Cheniere Energy was reported by Reu- ters as saying the NGPL outage would have no impact on its operations at the 25mn tonne per year (tpy) plant.
Data from Refinitiv show that around 600mn cubic feet (17mn cubic metres) per day had been flowing to Sabine Pass on the NGPL pipe- line over the past two weeks. According to the data provider, the total volume of gas flowing to Sabine Pass on all pipelines – including NGPL – averaged 3.6 n cubic feet (102 mcm) per day for the month so far, up to April 29. Despite weak
global demand amid the coronavirus (COVID- 19) pandemic, this marked an increase from 3.4 bcf (96 mcm) per day in March, but was down from a record monthly high of 4.0 bcf (113 mcm) per day in December 2019.
Buyers normally have to give Cheniere 45-60 days’ notice if they wish to cancel a contracted cargo, and this is expected to materialise in the coming weeks and months. Argus Media reported this week that around 16 cargoes scheduled for June loading at Cheniere’s two Gulf Coast terminals may have been cancelled, out of a total of up to 25 cancelled cargoes from US LNG terminals. As these cancellations emerge, Cheniere may seek to reduce gas flows to Sabine Pass and its other terminal, Corpus Christi LNG in Texas. There has been specula- tion since March that the company is consid- ering curbing its LNG production during the worst of the slump.
Nonetheless, exports from US LNG termi- nals are still anticipated to hit an annual average record high in 2020 for the fifth year in a row.™
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w w w . N E W S B A S E . c o m Week 17 30•April•2020