Cheniere preps for ‘next round’ of LNG Projects

(Bloomberg) — Sixteen months after finishing a terminal and sending the first cargo of U.S. shale gas overseas, Cheniere Energy Inc. is already preparing for its next round of export projects.

Cheniere is looking at new ways to finance more terminals that chill gas to a liquid and ship it across the globe, including skipping banks altogether and seeking out other capital sources, Chief Executive Officer Jack Fusco said in an interview at the company’s headquarters in Houston. The company has room to grow: It’s leased additional acres at its flagship Sabine Pass terminal in Louisiana and has the option to purchase more land at a Corpus Christi, Texas, site, where another export project is under construction.

Cheniere’s looking to build more LNG plants even as supplies from the U.S. to Australia are flooding the global market, expanding a glut of the fuel and prompting investors to back new export facilities at the slowest pace since 1999. But a second round of projects is emerging on speculation that the slowdown will lead to a post-2020 construction boom that’ll benefit low-cost producers offering flexible contracts.

“Our goal is to leverage the existing infrastructure to build whatever the next round requires,” Fusco said Monday. “We can do a better job financing and getting our financing costs down in the capital markets. We’re evaluating all those things to try to get ourselves much more competitive.”

Fusco said the company is open to building LNG plants smaller than the ones operating at Sabine Pass, which can each produce 4.5 million tons of the fuel a year.

Cheniere’s potential move to scale down has to do with “speed to market and what the customer needs,” he said.


Bloomberg News by Ryan Collins

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