Europe has relied on U.S. LNG imports to offset the loss of Russian gas, with nearly 70% of U.S. LNG exports heading to Europe in Q4 2023.
Cheniere Energy is an energy infrastructure company that primarily deals with liquefied natural gas (LNG)-related businesses. It has been providing a significant level of exports to Europe.
The company purchases natural gas from the gas market, processes it into LNG, and offers integrated energy companies as well as utilities and energy trading entities the option to load the LNG onto their vessels. As of January 10, 2024, Cheniere Energy’s stock price is $165 per share. The company has a market capitalization of $39 billion.
However, the US LNG industry has also come under pressure from those concerned the long-term burning of the fossil fuel is exacerbating climate change. Gas is made up of mainly of methane, a molecule which has the capacity to store greater warmth over a shorter lifespan than carbon dioxide. Cheniere says it has been deploying technologies such as drones and satellites to monitor methane leaks in its infrastructure.
Cheniere explains “LNG is part of the energy transition,” and renewable sources of energy could not be scaled up quickly enough to remove gas from the energy mix. “LNG is going to be needed for at least the next couple of decades.”
According to a report by ICIS, Cheniere Energy is planning to expand its existing and future production by a whopping 58% beyond what has been financially sanctioned. The company’s CEO, Jack Fusco, stated that as much as 30mpta in expansion volume across both Sabine Pass and Corpus Christi was in the early development stages.
In addition, Cheniere Energy has already sold incremental 3 million tons per annum of volume beyond stage 3, and the company is very focused on the next phase of growth. The company has also seen a brisk quarter with its Final Investment Decision for its Corpus Christi Stage 3 expansion and LNG offtake contracts for Corpus volume and expansion with South Korea’s POSCO, China’s PetroChina, Thailand’s PTT and US major Chevron.
Risk management company DNV projects a significant role for naturall gas in the global energy mix beyond 2050. Global demand for natural gas increases to 5,032 Bn m3 (175 EJ) around 2027 and plateaus for about a decade before gradually declining to 4,164 Bn m3 in 2050, a sixth (16%) lower than in 2035.
Therefore, based on future demand requirements and long-term contracts being signed, the future for Cheniere Energy’s LNG business looks bright; and peak gas production does not appear to be on the horizon just yet.
