Cheniere Energy, Inc. LNG recently announced that the Train 2 of the Corpus Christi liquefaction (CCL) project has produced enough volume of liquified natural gas (LNG) for its first commissioning cargo, ahead of schedule. This marks an important milestone for Cheniere as the firm is gearing up for the first shipment from the CCL Train 2 plant later this year.
Markedly, the company had dispatched the first cargo from the CCL project on Dec 11, 2018. Under the CCL project, it intends to develop three trains, each having a nominal production capacity of 4.5 million metric tons of liquefied natural gas (LNG) per year. While Train 1 has come online, Train 2 will be operational later this year and Train 3 is scheduled for completion in 2021.
Last month, Cheniere announced that it has signed a deal with Apache Corporation APA, wherein the latter will sell 140,000 million British thermal units of natural gas to CCL Stage 3 over 15 years. Notably, the CCL project is the third export facility in the United States that produces LNG, after Cheniere's Sabine Pass and Dominion Energy, Inc.'s D Cove Point terminal.
Last month, it made a final investment decision with respect to Train 6 of the Sabine Pass project. Train 5 of the Sabine project — whose construction was completed a few months back — is set for first commercial delivery in August 2019, under contracts with TOTAL S.A. TOT and Centrica plc.
Taking into account the impact of FDI related to the Sabine Pass Train 6 and increased run-rate production guidance, the company has lifted its EBITDA and distributable cash flow guidance for 2019. It now expects adjusted EBITDA and DCF in the band of $5.2-$5.6 billion and $8.40-$9.60 per share, respectively.
Boosting investors’ confidence, Cheniere authorized a stock buyback program of $1 billion for the next three years. Given first-mover advantage in the LNG export market, the firm is primed for significant revenue and earnings growth. The Zacks Rank #2 (Buy) company currently exports to around 30 countries worldwide, as the firm aims at turning the natural gas glut in the United States into export revolution. Cheniere seems well positioned to maintain the revenue growth trajectory over the coming years, backed by solid operations and long-term contracts. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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