Cheniere cashes in on LNG boom in Europe
Cheniere Energy plans to return more cash to shareholders as soaring demand and high prices continue to enrich oil and gas companies.
Boosting its dividend 20 percent to 40 cents a share, the Houston liquefied natural gas company is joining many of its peers in the oil and gas industry as the cash rolls in.
The Ukraine war has upended the global energy market in the year since Cheniere announced its first stock dividend in September 2021. The war helped drive demand for American natural gas in Europe as Russia sent less gas westward.
Soaring demand for gas exports from the Gulf Coast also is lifting prices and revenues for Cheniere, the largest LNG exporter in the U.S. The company more than doubled its revenues to $8 billion during the second quarter from $3 billion a year earlier while its profit jumped to $741 million from a loss of $329 million a year earlier.
The record profits flowing through the industry have helped oil and gas producers worldwide report a record $1.4 trillion in free cash flow for 2022, according to a report in August from consulting firm Deloitte.
Among the companies employing buybacks, dividend hikes or both are
BP, which said in August it would buy $3.5 billion of shares and raise its dividend by 10 percent to 6 cents a share;
TotalEnergies, which early this year promised to raise its 2022 interim dividend by 5 percent and buy $2 billion worth of shares during the first six months of 2022;
Shell, which announced an $8.5 billion share buyback program and an annual hike in its dividend of 4 percent;
Exxon, which in April said it would triple its buyback plan to $30 billion;
• and Chevron, which vowed to repurchase $10 billion worth of shares this year.
Cheniere is gearing up for more growth, CEO Jack Fusco said Monday on a call with investors. He said the company will develop projects that double its capacity to 90 million metric tons per year “over the longer term.”
In the near-term, Cheniere is expanding its Corpus Christi facility with its Stage 3 project, and last month, the company began the permitting process for an additional two trains in Corpus beyond the 7-train Stage 3 to be developed by the engineering firm Bechtel.
“The idea is to make sure that Bechtel is always busy,” Fusco said Monday, “and every four to six months there’s a new train being delivered.”
Cheniere shares jumped Tuesday by nearly $5, or 3 percent, to $165.67.