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Cheniere reports 3Q18 results

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LNG Industry,


Cheniere Energy, Inc. (Cheniere) has reported its 3Q18 results including several significant highlights.

Strategic

  • In November 2018, Cheniere entered into a 24-year LNG Sale and Purchase Agreement (SPA) with Polish state-owned oil and gas company Polskie Gornictwo Naftowe i Gazownictwo S.A. (PGNiG) for the sale of approximately 1.45 million tpy of LNG on a delivered ex-ship basis. Deliveries will commence in 2019, with the full annual quantity commencing in 2023. The purchase price for LNG is indexed to the monthly Henry Hub price, plus a fee.
  • In November 2018, Sabine Pass Liquefaction, LLC (SPL) entered into an Engineering, Procurement, and Construction (EPC) contract with Bechtel Oil, Gas and Chemicals, Inc. (Bechtel) for Train 6 of the SPL Project (defined below). SPL also issued limited notice to proceed to Bechtel to commence early engineering, procurement and site works.
  • In September 2018, Cheniere entered into a 15-year LNG SPA with Vitol Inc. (Vitol) for the sale of approximately 0.7 million tpy of LNG beginning in 2018.
  • In August 2018, Cheniere entered into a 25-year LNG SPA with CPC Corporation, Taiwan (CPC) for the sale of approximately 2 million tpy of LNG beginning in 2021.

Operational

  • As of 31 October 2018, more than 215 cargoes have been produced, loaded and exported from the SPL Project year to date. To date, more than 475 cumulative LNG cargoes have been exported from the SPL Project, with deliveries to 29 countries and regions worldwide.
  • In August 2018, feed gas was introduced to Train 1 of the CCL Project (defined below) as part of the commissioning process. In September 2018, feed gas was introduced to Train 5 of the SPL Project as part of the commissioning process, and first LNG production from Train 5 occurred in October 2018.

Financial

  • For the nine months ended 30 September 2018, Cheniere achieved Consolidated Adjusted EBITDA of over US$2.0 billion and Distributable Cash Flow of approximately US$470 million.
  • In September 2018, Cheniere closed the previously announced merger of Cheniere Energy Partners LP Holdings, LLC (Cheniere Partners Holdings) with its wholly owned subsidiary. As a result of the merger, all of the publicly-held shares of Cheniere Partners Holdings not owned by Cheniere were cancelled and shareholders received 0.4750 shares of Cheniere common stock for each publicly-held share of Cheniere Partners Holdings.
  • In September 2018, Cheniere Energy Partners, L.P. (Cheniere Partners) issued an aggregate principal amount of US$1.1 billion of 5.625% Senior Notes due 2026 (the ‘2026 CQP Senior Notes’). Net proceeds of the offering, after deducting commissions, fees and expenses, were used to prepay all of the outstanding indebtedness under Cheniere Partners’ credit facilities (the “CQP Credit Facilities”). After applying the proceeds from this offering, only a US$115 million revolving credit facility remains as part of the CQP Credit Facilities, and both the 2026 CQP Senior Notes and Cheniere Partners’ outstanding US$1.5 billion of 5.250% Senior Notes due 2025 became unsecured.

CEO comments

“Our focus on execution and operational excellence, coupled with favourable LNG supply and demand fundamentals, drove solid financial results again in the third quarter, and today we are raising our full year 2018 Consolidated Adjusted EBITDA and Distributable Cash Flow guidance,” said Jack Fusco, Cheniere’s President and Chief Executive Officer. “Our commercial momentum continues, with SPAs recently completed with CPC and Vitol, and today we’re pleased to announce a long-term SPA with PGNiG. These SPAs support our growth plans and solidify our position as the leader in US LNG:

“As we look forward to 2019, we expect to build upon our reputation of superior execution by placing Corpus Christi Trains 1 and 2 and Sabine Pass Train 5 into service safely, ahead of schedule, and within budget, and continue to leverage our world-scale infrastructure position to commercialise and grow our LNG platform. To that end, we have finalised the Sabine Pass Train 6 EPC contract with Bechtel, and we are releasing Bechtel to commence early engineering, procurement, and construction activities for Train 6 ahead of making a Final Investment Decision.”

“Today we are also raising our run rate Consolidated Adjusted EBITDA and Distributable Cash Flow guidance. The increase in these metrics is driven by increased expected run-rate LNG production, as we have identified significant incremental production potential from debottlenecking opportunities, maintenance optimisation, and plant overdesign.”

Read the article online at: https://www.lngindustry.com/liquid-natural-gas/09112018/cheniere-reports-3q18-results/

 

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