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A Look into Cheniere Energy’s Recent Operating Performance

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Cheniere Energy’s 1Q17 revenue

Cheniere Energy’s (LNG) 1Q17 revenue rose to $1.2 billion from $69.0 million in 1Q16, a rise of 18x YoY (year-over-year). This rise in Cheniere’s 1Q17 revenue was mainly driven by the commencement of LNG (liquefied natural gas) exports from Train 1 and Train 2 at Sabine Pass.

Cheniere Energy exported 43 cargoes from Sabine Pass in 1Q17. The company had delivered 100 cargoes by early April 2017, of which 50 cargoes weren’t contracted and sold by Cheniere Marketing. These exports were mainly driven by a spike in LNG demand from Asian countries during the winter season. Total LNG volumes lifted in 1Q17 were 154 TBtu (trillion British thermal units), compared to 15 TBtu in the same quarter of the previous year.

Cheniere Energy’s revenue is expected to see a similar trend in the second quarter and beyond driven by the commencement of Trains 3 and 4. Train 3 achieved substantial completions by the end of March 2017, while Train 4 began commissioning in March 2017.

Train 4 is expected to be completed sometime in November 2017. Recently, South Korea’s Korean Gas Corporation received its first LNG shipment from Train 3 as part of its long-term 20-year sale and purchase agreement.

Two trains at the Corpus Christi liquefaction facility are also 61.7% complete. These two trains are expected to come online in 2019.

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Cheniere Energy’s 1Q17 earnings

Cheniere Energy reported net income of $54.0 million in 1Q17, compared to net income of $321 million in 1Q16. The rise in the company’s net income was driven by higher income from operations and lower derivative losses. The rise was partially offset by higher interest expenses due to growth in the company’s outstanding debt. 

We’ll look further into Cheniere Energy’s balance sheet position in the next article.

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