Cheniere Energy, Inc. (NYSEMKT:LNG) reported a net loss attributable to common stockholders of $297.8 million, or $1.31 per share (basic and diluted), for the three months ended September 30, 2015, compared to a net loss attributable to common stockholders of $89.6 million, or $0.40 per share (basic and diluted), for the comparable 2014 period. For the nine months ended September 30, 2015, Cheniere reported a net loss attributable to common stockholders of $684.0 million, or $3.02 per share (basic and diluted), compared to a net loss attributable to common stockholders of $389.3 million, or $1.74 per share (basic and diluted), during the corresponding period of 2014.
Significant items for the three months ended September 30, 2015 resulted in a loss of $134.2 millionand are related to derivative loss primarily associated with the changes in long-term LIBOR during the period, and development expense, partially offset by changes in operating and maintenance expense associated with the increase in fair value of certain natural gas purchase agreements related to gas procurement for the liquefaction project currently under construction at the Sabine Pass LNG terminal adjacent to the existing regasification facilities (the “Sabine Pass Liquefaction Project”). Significant items for the nine months ended September 30, 2015 resulted in a loss of $343.8 million and are related to derivative loss, loss on early extinguishment of debt, and development expense, partially offset by changes in operating and maintenance expense described above.
Included in general and administrative expense were non-cash compensation expenses of $27.1 millionand $85.2 million for the three and nine months ended September 30, 2015, respectively, compared to$21.2 million and $80.4 million for the comparable 2014 periods, respectively.
Results are reported on a consolidated basis and include our ownership interest in Cheniere Energy Partners, L.P. (“Cheniere Partners”) (NYSE MKT: CQP), which is based on our 100% ownership of the general partner of Cheniere Partners and 80.1% ownership interest in Cheniere Energy Partners LP Holdings, LLC (NYSE MKT: CQH) which owns a 55.9% limited partner interest in Cheniere Partners.
Recent Significant Events
- In July 2015, we entered into a liquefied natural gas (“LNG”) Sale and Purchase Agreement (“SPA”) with Central El Campesino for approximately 0.6 million tonnes per annum (“mtpa”) through our subsidiary, Cheniere Marketing International LLP (“Cheniere Marketing”). Volumes are to be delivered ex-ship (“DES”) for 20 years beginning in 2019 from the liquefaction project currently under construction near Corpus Christi, Texas (the “Corpus Christi Liquefaction Project”).
- Cheniere Marketing entered into LNG sales arrangements with Électricité de France, S.A. (“EDF”) for the delivery of LNG cargoes on a DES basis. The sales arrangements with EDF cover the delivery of up to approximately 189 million MMBtus total through 2018.
- Sabine Pass Liquefaction, LLC (“SPL”) entered into a $1.2 billion working capital facility that will be used primarily for certain working capital requirements related to developing and placing into operation the Sabine Pass Liquefaction Project.
Liquefaction Projects Update
Sabine Pass Liquefaction Project
Through Cheniere Partners, we are developing up to six natural gas liquefaction trains (“Trains”), each with an expected nominal production capacity of approximately 4.5 mtpa of LNG, at the Sabine Pass LNG terminal adjacent to the existing regasification facilities.
The Trains are in various stages of development:
- Construction on Trains 1 and 2 began in August 2012, and as of September 30, 2015, the overall project completion percentage for Trains 1 and 2 was approximately 95.2%, which is ahead of the contractual schedule. Based on our current construction schedule, we anticipate that Train 1 will produce LNG as early as late 2015.
- Construction on Trains 3 and 4 began in May 2013, and as of September 30, 2015, the overall project completion percentage for Trains 3 and 4 was approximately 73.6%, which is ahead of the contractual schedule. We expect Trains 3 and 4 to become operational in late 2016 and 2017, respectively.
- The permitting process for Trains 5 and 6 has been completed. In April 2015, Cheniere Partnersreceived U.S. Federal Energy Regulatory Commission (“FERC”) authorization to site, construct, and operate Trains 5 and 6. In June 2015, Cheniere Partners received authorization from the U.S. Department of Energy (“DOE”) to export LNG to non-free trade agreement (“non-FTA”) countries.
- Construction on Train 5 began on June 30, 2015, and we expect Train 5 to commence operations as early as 2018. We expect to commence construction on Train 6 upon entering into acceptable commercial arrangements and obtaining adequate financing.
Corpus Christi Liquefaction Project
We are developing up to five Trains, each with an expected nominal production capacity of approximately 4.5 mtpa of LNG, as part of the Corpus Christi Liquefaction Project.
The Trains are in various stages of development:
- Construction on Trains 1 and 2 began in May 2015. As of September 30, 2015, the overall project completion percentage for Trains 1 and 2 was approximately 22.8%, with engineering, procurement and construction approximately 82.0%, 32.0% and less than 1% complete, respectively. The construction of the Corpus Christi Pipeline is planned to commence in 2016.
- We have entered into an SPA for approximately 0.8 mtpa of LNG volumes that commence with Train 3 and will contemplate making an FID to commence construction upon entering into additional SPAs. To date, we have obtained sufficient financing commitments and all necessary regulatory permits required to support the development of Trains 1 through 3.
- Trains 4 and 5 are under development. We have initiated the regulatory process by filing the NEPA pre-filing request with the FERC and requesting authorization from the DOE to export LNG to both FTA and non-FTA countries. In August, the DOE granted authorization to export LNG from Trains 4 and 5 to FTA countries. (Original Source)
Shares of Cheniere Energy closed yesterday at $49. LNG has a 1-year high of $82.32 and a 1-year low of $44.25. The stock’s 50-day moving average is $50.02 and its 200-day moving average is $64.88.
On the ratings front, Cheniere has been the subject of a number of recent research reports. In a report issued on October 13, BTIG analyst William Frohnhoefer maintained a Buy rating on LNG, with a price target of $100, which implies an upside of 104.1% from current levels. Separately, on October 12, Barclays’ Christine Cho maintained a Buy rating on the stock and has a price target of $64.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, William Frohnhoefer and Christine Cho have a total average return of -5.7% and 11.3% respectively. Frohnhoefer has a success rate of 23.3% and is ranked #3425 out of 3808 analysts, while Cho has a success rate of 50.0% and is ranked #1679.
Cheniere Energy Inc is engaged in LNG-related businesses. It owns and operates the Sabine Pass LNG terminal in Louisiana through its ownership interest in and management agreements with Cheniere Energy Partners, L.P.