US LNG producer Cheniere Energy delivered over 70% of its export cargoes to Europe during the first half of 2022 as buyers were hit with energy security fears.
In the first six months of this year, Cheniere exported 316 LNG cargoes, up from 272 in the same period of 2021.
Speaking on a second-quarter results call, Cheniere president and chief executive Jack Fusco said that at the end of the period, nearly 225 of those cargoes had landed in Europe, which is more than 70% of the company’s export cargoes produced in 2022.
This compares with less than 40% in the first half of 2021.
Fusco said this demonstrates the flexibility of Cheniere’s contracts, in that these allow the LNG to reach the markets of greater need.
He said that since the start of the second quarter and through July, Cheniere has signed long-term LNG supply contracts that aggregate at around 140m tonnes in total running into 2050 and beyond.
Fusco named Posco International, Equinor, Chevron, PetroChina and PTT as the buyers.
He said the contract with PetroChina is the first for Cheniere that extends into the second half of this century.
Fusco said the contracts all include provisions for the long-term volumes to double if Cheniere moves forward with liquefaction expansion.
He said this demonstrates the demand for LNG in the market and revealed that Cheniere is now looking at adding a further 30 million tonnes per annum of liquefaction capacity across its Sabine Pass and Corpus Christi projects.
Fusco said Cheniere started providing its promised cargo emission tags — CE tags — for its long-term customers during the second quarter.
These tags are the first of their kind in the industry and provide an estimate of the greenhouse gas emission profile of each cargo, from the wellhead to the cargo delivery point including LNG shipping.
“We expect the tags will help identify opportunities to quantify and improve environmental performance throughout the LNG supply chain,” Fusco said.
Speaking about the LNG market, Cheniere executive vice president and chief commercial officer Anatol Feygin said total LNG demand has continued to grow but is constrained by a lack of new supply and sustained elevated prices, which added to a record amount of commercial activity in the second quarter.
He said the US exported 19.6m tonnes of LNG in the second quarter, up 12% compared to the same period of last year, to become the world’s largest LNG exporter. But second-quarter volumes were down due to the outage at Freeport LNG and planned maintenance.
Feygin said Europe is moving to increase its LNG import capacity by over 50% to about 280 mtpa and has sanctioned 11 LNG import terminals in the first half of this year.
In contrast, LNG demand from Asia fell, counterbalancing the picture in Europe.
But he said Cheniere expects this to be “transient” with long-term fundamentals in Asia remaining strong, with ample upside potential as shown by the long-term contracts signed.
Cheniere turned in a first-half net loss of $124m, against a net income of $64m in the same six months a year earlier.
