Cheniere Energy's Annual LNG Revenue Falls on Lower Natural Gas Prices

(Reuters) — U.S. liquefied natural gas (LNG) company Cheniere Energy on Thursday forecast a lower core profit for 2024 as prices of the fuel buckle under excess supply, sending its shares down 1.7% premarket.

Record production, ample inventories in storage and relatively mild weather conditions led to a nearly 40% fall in average Henry Hub prices for U.S. natural gas NGc1 in 2023, pressuring margins for LNG firms such as Cheniere.

The price weakness also prompted Chesapeake Energy — soon to be the biggest U.S. gas producer after its merger with Southwestern Energy — to cut its 2024 production plan by roughly 30% on Tuesday.

Cheniere expects adjusted core profit between $5.5 billion and $6 billion for 2024, about 35% lower from the previous year at mid-point and below analysts' expectations of $6.2 billion, according to LSEG data.

Its quarterly profit fell 65% to $1.38 billion after LNG revenues nearly halved to $4.58 billion, primarily hurt by a decrease in Henry Hub pricing, on which the majority of their long-term LNG sales contracts are signed.

Cheniere signed several long-term LNG sales agreements with companies in 2023, including Foran Energy and BASF.

The company's LNG volumes loaded for the quarter marginally rose to 615 trillion British thermal unit (TBtu), compared with 600 TBtu last year.

Cheniere is the biggest U.S. buyer of gas and the biggest U.S. exporter of LNG, with the capacity to produce about 45 MTPA of LNG at Corpus Christi in Texas and Sabine.

The company is also building new liquefaction trains at Corpus Christi that will add more than 10 MTPA of capacity between 2025-2027.

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