Cheniere Energy is driving forward on production growth plans and sees current market volatility, which has been heightened by Russia’s invasion of Ukraine, as driving more long-term contracting of LNG.
Jack Fusco, president and chief executive of the US LNG producer, described the situation in eastern Europe following Russia’s invasion of Ukraine as “tragic”.
“If anything, the high prices, the volatility drive even more energy security and long-term contracting,” Fusco said, answering questions from analysts.
“The fact that there is a scarcity of LNG these days is driving more and more conversation on how to increase our infrastructure and secure long-term contracts for our European customers.”
Cheniere executive vice president and chief commercial officer Anatol Feygin highlighted the moves by Lithuania and Poland to build infrastructure and avail themselves of supply.
“The reliable and flexible product that we put on the water will be a key part of that going forward,” he said.
“I think overall the industry needs to settle down a bit,” Fusco said, adding that the company’s thoughts and prayers are with eastern Europe.
But he said: “What is showing is the value of natural gas around the world.”
Fusco said the LNG market strength provides “significant long-term growth tailwinds” for the business.
He said this bolsters Cheniere confidence in taking a final investment decision this year on its 10 million tonne per annum expansion project — Stage 3 of its Corpus Christi LNG plant.
Cheniere's net loss increased $2.3bn in 2021, up from $85m a year earlier primarily due to an increase in derivative losses and the non-recurrence of revenues recognised from cancelled LNG cargoes during the full year 2020.
Revenue soared 70% to $15.9bn from $9.4bn a year earlier.
The company repaid around $1.2bn of debt during the year and repurchased 101,944 shares.
Cheniere exported a record 153 cargoes during the fourth quarter and 566 for 2021, adding that it has now shipped over 2000 cargoes.
Feygin said that two-thirds of contracts signed by Cheniere last year were with Asian buyers, 45% of which were from China.
Fusco said: “2021 proved to be a defining year for Cheniere.”
He highlighted the marked by significant milestones across our business, including the realisation of our initial nine-train platform across Sabine Pass and Corpus Christi, and the implementation of our comprehensive capital allocation plan.
The company raised its 2022 financial guidance.
Fusco said this is based on the early completion of Train 6 at Cheniere’s Sabine Pass plant, the sustained strength in the global LNG market as demand continues to grow and the timing of delivery of cargoes near the close of 2021.
