LNG exporter has ‘a breakthrough year’ as it counters skeptics
GAS exporter Cheniere Energy believes 2017 was a breakthrough year that proved its doubters wrong. The Houston-based company, the only one in the continental United States in 2017 to export liquefied natural gas, had originally planned to become an LNG importer. But a long-term glut of cheap natural gas in the U.S. stemming from an unprecedented production boom prompted Cheniere to reverse course in 2010 and invest billions to become an exporter.
Many analysts criticized the move, questioning whether the company could secure enough customers to justify a capital investment that has reached about $30 billion. Cheniere first delivered LNG in February 2016, when its stock price hovered in the low $20s. That share price has since tripled.
“2017 was a breakthrough year for Cheniere, but we feel like we’re just getting started,” chairman, president and CEO Jack Fusco said. “We’re signing new contracts, building new LNG capacity, and operating reliably and safely.”
Cheniere generated more than $5.6 billion of revenue last year, and reported consolidated net income of more than $1.8 billion and more than $600 million in distributable cash flow.
The company ranks No. 4 on this year’s Chronicle 100 list of the top local public companies.
Its Sabine Pass plant, at the border of Texas and Louisiana, has shipped to 26 countries and regions around the world, with Mexico, South Korea and China the top destinations. Sabine currently has four operational LNG processing plants and a fifth slated to come online in 2019.
Cheniere recently decided to invest in a third processing facility at its Corpus Christi LNG terminal. It should start up sometime in 2019.
The U.S. Energy Information Agency has predicted a continued expansion of exports as projects by other companies come online and work to catch up with Cheniere.
Earlier this year, Dominion Energy’s Cove Point, Md., plant came online, while Kinder Morgan's facility at Elba Island, Ga., is expected to start up this summer. Freeport LNG in Texas also is slated to come online this fall.
The first quarter of 2018 was Cheniere’s best recorded, with revenue nearly double the first three months of 2017.