Cheniere posts USD 410 million loss for 2014

Houston-based LNG player Cheniere Energy reported a net loss of $70.8 million and $410 million for the three months and year ended December 31, 2014, compared to a net loss of $61.3 million and $258.1 million for the same periods in 2013, 

Significant items contributing to losses of $29.8 million and $242.8 million for the three months and year ended December 31, 2014, are related to development expenses primarily for the fifth and sixth natural gas liquefaction trains the company is developing through Sabine Pass Liquefaction at the Sabine Pass LNG terminal adjacent to the existing regasification facilities, the company said in a statement.

Sabine Pass liquefaction project

Cheniere continues to make progress on the Liquefaction project, which is being developed for up to six Trains, each with a nominal production capacity of approximately 4.5 million tonnes per annum.

The Trains are in various stages of development.

• Construction on Trains 1 and 2 began in August 2012, and as of December 31, 2014, the overall project for Trains 1 and 2 was approximately 81% complete, which is ahead of the contractual schedule. Based on the current construction schedule, Cheniere anticipates that Train 1 will produce liquefied natural gas as early as late 2015.
• Construction on Trains 3 and 4 began in May 2013, and as of December 31, 2014, the overall project for Trains 3 and 4 was approximately 54% complete, which is ahead of the contractual schedule. The company expects Trains 3 and 4 to become operational in late 2016 and 2017, respectively.
• Trains 5 and 6 are under development. Cheniere has entered into LNG sale and purchase agreements for approximately 3.75 mtpa in aggregate that commence with the date of first commercial delivery for Train 5. The company has received authorizations from the U.S. Department of Energy to export 503 Bcf per year of LNG volumes from Trains 5 and 6 to free trade agreement countries. Authorization to export LNG to non-FTA countries is pending.  In December 2014, the Federal Energy Regulatory Commission published the final Environmental Assessment, and final FERC authorization is subject to commissioner approvals.

The company will look into the possibility of making a final investment decision to commence construction of Train 5 and Train 6 based on, among other things, entering into engineering, procurement and construction contracts, entering into acceptable commercial arrangements, receiving all regulatory approvals and obtaining financing.

Corpus Christi Liquefaction Project

The company also continues to make progress on the commercialization and development of the Corpus Christi Liquefaction project, which is being designed for up to three Trains with expected aggregate nominal production capacity of approximately 13.5 mtpa of LNG.

• To date, Cheniere has entered into SPAs aggregating approximately 6.9 mtpa of LNG volumes commencing with Trains 1 and 2, and approximately 1.5 mtpa of LNG volumes commencing with Train 3.
• In December 2014, the company received authorization from the FERC to site, construct, and operate the Corpus Christi Liquefaction project. Cheniere received authorization from the DOE to export up to approximately 767 Bcf per year of domestically produced LNG to FTA countries. Authorization to export LNG to non-FTA countries is pending and Cheniere expects to receive the remaining regulatory approvals during the first half of 2015.

The company will contemplate making a final investment decision to commence construction of the Corpus Christi Liquefaction Project based upon, among other things, entering into acceptable commercial arrangements, receiving all regulatory approvals and completing financing.

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Image: Cheniere