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Will Cheniere Energy Beat Q3 2018 Revenue Estimates?

Vineet Kulkarni - Author
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Nov. 5 2018, Published 3:50 p.m. ET

Revenues

Cheniere Energy (LNG) is slated to release its third-quarter results on November 8. According to consensus estimates, Cheniere Energy will report total revenues of $1.63 billion for the quarter ended September 30, suggesting revenue growth of 16% year-over-year. In Q3 2017, the company reported revenues of $1.4 billion. Cheniere Energy posted revenues of $1.54 in the second quarter, reflecting growth of 24.3% year-over-year.

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Revenue drivers

Rising demand for liquified natural gas and Cheniere Energy’s expansion projects during the quarter could lift its top line. US liquified natural gas exports to China—one of the biggest consumers—fell significantly in August compared to July owing to trade disputes between the countries.

According to the U.S. Energy Information Administration, US LNG exports from Sabine Pass to China totaled 14.2 bcf (billion cubic feet) in the first two months of the third quarter—compared to 17.3 bcf in the third quarter of 2017, which may hurt Cheniere’s third-quarter performance.

Long-term contracts

Cheniere Energy reported a notable increase in revenues over the last few quarters due to long-term contracts. In September, Cheniere Energy signed a 15-year agreement to supply 0.7 million tonnes of liquified natural gas per year to the energy trading company Vitol Group.

In August, Cheniere Energy announced its deal with the Taiwan-based CPC Corporation to sell approximately 2 million tonnes of LNG per year for 25 years. Earlier this year, the company signed a 15-year agreement to sell liquified natural gas to Trafigura, a European commodities trader.

Cheniere also signed two similar agreements with PetroChina in February to supply 1.2 million tonnes of liquified natural gas per year through 2043.

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