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    LNG
    Earnings call· Mar 2026(Q1 FY26)

    Cheniere Energy Q1 FY26 earnings call LNG

    May 7, 2026 Source

    Executive summary

    Cheniere Energy Q1 FY26 — Record LNG Exports and Raised Full-Year Guidance

    Cheniere delivered a strong operational quarter with record LNG exports and significantly raised its full-year financial guidance, driven by enhanced production and optimization. The company continues to advance its growth projects and execute its capital allocation plan, including opportunistic share repurchases. Despite global energy market volatility and supply disruptions, Cheniere remains focused on providing reliable, flexible LNG supply and leveraging its integrated platform for future growth.

    Highlights

    5

    • Generated consolidated adjusted EBITDA of over $2.3 billion in Q1 FY26.

    • Achieved distributable cash flow of approximately $1.7 billion in Q1 FY26.

    • Exported a record 187 LNG cargoes through March, topping the previous record.

    • Increased full-year 2026 financial guidance for consolidated adjusted EBITDA to $7.25B-$7.75B and DCF to $4.75B-$5.25B.

    • CCL Stage 3 project is 97% complete, with Trains 6 and 7 tracking ahead of schedule for substantial completion.

    Concerns

    4

    • Reported a net loss of approximately $3.5 billion in Q1 FY26, primarily due to unrealized noncash derivative impacts.

    • Geopolitical disruption in the Middle East led to the closure of the Strait of Hormuz, disrupting ~7 million tons of LNG supply per month.

    • Australia's Wheatstone facility (9 million tons per annum capacity) experienced a multi-week outage due to Cyclone Narelle.

    • Europe's storage levels exited winter near 5-year lows, with a deficit of 13.2 bcm (approximately 10 million tons LNG equivalent).

    Guidance & targets

    10
    CategoryTargetConfidence
    Full-year 2026 Consolidated Adjusted EBITDA
    $7.25 billion to $7.75 billion
    high materiality
    High
    Full-year 2026 Distributable Cash Flow (DCF)
    $4.75 billion to $5.25 billion
    high materiality
    High
    Full-year 2026 Production Forecast
    52 million to 54 million tons
    high materiality
    High
    CQP Distribution
    $3.10 to $3.40 per common unit
    medium materiality
    High
    Dividend Growth
    Approximately 10% annually
    medium materiality
    High
    Share Count Target
    175 million shares outstanding
    medium materiality
    High
    SPL Expansion Train 7 FID
    Early next year
    high materiality
    High
    CCL Expansion Project FERC Approval
    First half of next year
    high materiality
    High
    Unsold Open Volumes
    Less than 1 million tons or less than 50 TBtu
    medium materiality
    High
    Market Margins Impact on EBITDA
    Less than $50 million
    low materiality
    High

    Operational metrics

    27
    Consolidated Adjusted EBITDA
    $2.3 billion
    Q1 FY26

    Reflects higher LNG volumes delivered, higher contributions from optimization, and a onetime alternative fuel tax credit.

    Distributable Cash Flow
    $1.7 billion
    Q1 FY26

    Reflects higher LNG volumes delivered, higher contributions from optimization, and a onetime alternative fuel tax credit.

    LNG Produced from Facilities
    646 TBtuMeaningfully higher than 1Q 2025
    Q1 FY26

    Q1 FY26 volumes were impacted by in-transit timing dynamics that favored 4Q 2025 and 2Q 2026. Expected to be the lowest volume quarter for the year.

    Net Loss
    $3.5 billion
    Q1 FY26

    Primarily due to unrealized noncash derivative impact related to long-term IPM agreements and accounting mismatch for natural gas purchase and LNG sale.

    Adjusted Net Income
    $1 billion
    Q1 FY26

    Adjusted for noncash unrealized derivative losses and associated impacts to income tax and noncontrolling interest.

    Shares Repurchased
    2.7 million shares
    Q1 FY26

    Part of the opportunistic and disciplined repurchase plan, bought for over $500 million.

    Amount Spent on Share Repurchases
    $535 million
    Q1 FY26

    Reflects opportunistic deployment of capital given share price movement.

    Debt Repaid
    $250 million
    Q1 FY26

    Repaid with cash on hand, fully redeeming remaining SPL 2026 notes and amortizing a portion of SPL 2037 notes.

    Dividend Declared
    $0.555
    Q1 FY26

    Represents a payout of over $116 million for common shareholders.

    Growth Capital Funded
    $1 billion
    Q1 FY26

    Funded across business for Stage 3, Midscale 8 and 9, SPL/CCL expansion development, and Gregory power plant.

    Consolidated Cash
    $1.8 billion
    Q1 FY26

    Maintained substantial liquidity with billions of dollars of undrawn revolver and term loan capacity.

    LNG Supply Growth (Industry Expectation)
    40 million tons
    Full-year 2026

    Expected supply growth for the industry coming into the year, now largely offset by disruptions.

    Middle East LNG Supply Disruption
    7 million tons
    Ongoing

    Due to closure of Strait of Hormuz, approximately 100 cargoes continue to be disrupted.

    Australia Wheatstone Facility Outage Capacity
    9 million tons per annum
    Q1 FY26

    Multi-week outage following Cyclone Narelle.

    Total Q1 Supply Disruption
    8 million tons
    Q1 FY26

    Aggregate of Middle East, U.S. (Winter Storm Fern), and Australia Wheatstone disruptions.

    Europe Storage Deficit
    13.2 bcmNear 5-year lows
    Exiting winter

    Versus the 5-year average, highlighting Europe's dependence on LNG.

    Europe LNG Imports Needed for 80% Storage
    10 million tonsMore than last year
    Ahead of next winter

    Required to reach minimum storage levels.

    Europe LNG Imports Needed for 90% Storage
    15 million tonsMore than last year
    Ahead of next winter

    Required to reach historical storage levels.

    Europe LNG Imports
    40 million tons12% growth
    Q1 FY26

    Despite a month-on-month drop in March, remaining flat year-on-year as more cargoes headed east.

    Qatari Liquefaction Trains Lost Capacity
    12.8 million tons per annum
    Ongoing

    Industry has effectively lost two liquefaction trains in Qatar.

    LNG Market Growth Forecast
    600 million tons
    By 2030

    Expected market size, with new supply helping to moderate prices.

    LNG Market Growth Forecast
    700 million tons
    By 2040

    Expected market size.

    LNG as Primary Energy
    3%
    Current

    Represents a small portion of global primary energy.

    Henry Hub Volatility Impact on EBITDA
    $100 million
    Full-year 2026

    Potential swing in EBITDA for a $0.50 movement in Henry Hub prices.

    Train Timing Impact on EBITDA
    $50 million
    Full-year 2026

    Potential swing in EBITDA for a half-month change in the timing of Train 6 and 7 substantial completion.

    Third-Party Cargoes Sourced
    30 TBtu
    Q1 FY26

    Part of optimization activities, freeing up shipping and optimizing certain cargoes.

    Open Capacity Sold for 2027
    Over 1 million tons
    Since last call

    Sold as margins moved higher from under $4 to $6-$7, strengthening cash flow visibility.

    Industry KPIs

    2
    MetricValueDetails
    FCF shareholder distributions$1.7B DCF, $0.555/share dividend, $535M buybackUSD
    Weather event volume earnings impactNot quantified

    Orderbook & backlog

    3
    Share Buyback Authorization$9 billionQ1 FY26

    New authorization

    Remaining under current authorization, to be deployed opportunistically through the end of the decade.

    Unsold Open Volumes RemainingLess than 1 million tonsQ1 FY26

    Equivalent to less than 50 TBtu for full-year 2026, due to continued forward selling.

    SPAs Not Yet Underpinning FIDApproximately 10 million tonsQ1 FY26

    More than enough to cover Sabine 7 project plus debottlenecking and the first train of a Corpus expansion.

    Deals & partnerships

    1
    CEIBond Issuance$1 billion (2036 notes) and $750 million (2056 notes)10-year and 30-year

    Inaugural 30-year issuance. A portion of proceeds used to prepay $550 million of Corpus Christi term loan and cancel $600 million of unused commitments.

    Capital programs

    5
    CCL Stage 3 Projectunderway
    Spent to date: 97% complete

    Train 5 achieved substantial completion in March. Trains 6 and 7 remain on track for substantial completion in the summer and fall, respectively, tracking a few weeks ahead of schedule. First LNG at Train 6 expected within a few days.

    Mid-scale Trains 8 and 9 and Debottlenecking Projectunderway
    Spent to date: 37% complete

    Tracking ahead of schedule on a number of execution fronts. Piling is nearly complete with approximately 8,000 piles having been driven. The first structural steel has been erected and the next major construction milestone is the first above-ground piping, scheduled to be installed this month.

    SPL Expansion Train 7announced

    Benefit: Accretively grow Cheniere production platform by approximately 10%

    Budgeting for limited notices to proceed this year. Expect to begin issuing LNTPs shortly, with FID expected early next year.

    CCL Expansion Projectannounced

    Benefit: Accretively grow Cheniere production platform by approximately 10%

    Received FERC scheduling notice, supporting expectation of FERC approval in the first half of next year (2027).

    Gregory Power Plantunderway

    Benefit: Support incremental power needs at Corpus

    To support incremental power needs at Corpus over time as the mid-scale trains are completed.

    Risks & headwinds

    5
    Geopolitical disruption and supply shortageOngoing

    Closure of Strait of Hormuz; damage to QatarEnergy's LNG facility at Ras Laffan; ~7 million tons of LNG supply per month disrupted.

    Mitigation: Diversified portfolio and secure, reliable supply from Cheniere; re-optimization of U.S. cargoes to meet demand.

    LNG supply disruptions from other regionsQ1 FY26

    Australia's Wheatstone facility (9 million tons per annum capacity) experienced a multi-week outage.

    Mitigation: Cheniere's operational reliability and flexibility to support customers.

    Tight European gas storage levelsAhead of next winter (2026/2027)

    Europe's storage levels near 5-year lows with a deficit of 13.2 bcm (10 million tons LNG equivalent) versus the 5-year average.

    Mitigation: Highlights Europe's dependence on LNG and intensifies competition for marginal LNG supplies.

    Unrealized noncash derivative impact on GAAP net incomeQ1 FY26

    Net loss of approximately $3.5 billion in Q1 FY26.

    Mitigation: These noncash unrealized mark-to-market losses are expected to unwind over time and generate gains as intended fixed liquefaction fees are realized from IPM contracts.

    Volatility in global energy marketsFull-year 2026

    Impact on EBITDA from Henry Hub volatility ($0.50 swing = $100M) and CMI margins ($1 change = <$50M).

    Mitigation: Highly contracted business model with long-duration fixed fee cash flows; minimal open exposure for 2026.

    Q&A highlights

    8

    How are customer conversations evolving regarding U.S. LNG reliability versus higher prices, given Middle East disruptions?

    Cheniere is in an enviable position, focusing on supporting key relationships. The flexibility and security of U.S. LNG are being highlighted, and while the short-term focus is on replacing lost volumes, the long-term growth trajectory for LNG remains intact.

    “if not now, if not us, whom and when.”

    asked by Jeremy Tonet · answered by Anatol Feygin

    2 min read5 chapters

    Detailed Narrative

    01

    Geopolitical Impact on LNG Markets

    The closure of the Strait of Hormuz and damage to QatarEnergy's LNG facility at Ras Laffan have created a significant shock in global energy markets, exacerbating an already tight LNG supply situation. This disruption has led to a sharp repricing across regional gas markets, with the JKM-TTF spread flipping to favor Asia, causing U.S. cargoes to re-optimize towards higher netbacks in the region. The industry has effectively lost 12.8 million tons per annum of Qatari liquefaction capacity, which could be offline for up to five years, tightening the supply outlook for 2026 and 2027.

    02

    Operational Excellence and Production Ramp-Up

    Cheniere's operations team has successfully addressed feed gas composition-related challenges experienced last year, leading to enhanced operational reliability and record LNG exports in Q1 FY26. The team has increased utilization across both sites through root cause analysis, innovative solutions, and debottlenecking opportunities. These efforts, combined with accelerated timelines for Stage 3 trains, have resulted in an upward revision of the 2026 production forecast by approximately 1 million tons.

    03

    Growth Project Progress and Future Expansions

    The CCL Stage 3 project is 97% complete, with Train 5 achieving substantial completion in March and Trains 6 and 7 tracking ahead of schedule for summer and fall completion, respectively. Mid-scale Trains 8 and 9 and the debottlenecking project are 37% complete and also tracking ahead. For future growth, Cheniere is budgeting for limited notices to proceed on SPL expansion Train 7 this year, targeting FID early next year. The CCL expansion project received its FERC scheduling notice, aligning with expected FERC approval in the first half of 2027.

    04

    Comprehensive Capital Allocation Strategy

    Cheniere continues to execute its capital allocation plan, deploying approximately $1.2 billion in Q1 FY26 towards growth CapEx, shareholder returns, and balance sheet management. The company repurchased 2.7 million shares for $535 million, demonstrating an opportunistic and disciplined approach to its $9 billion buyback authorization. A dividend of $0.555 per common share was declared, with a commitment to 10% annual growth through the decade, while also repaying $250 million in debt and issuing new long-term notes.

    05

    Financial Performance and Guidance Drivers

    Q1 FY26 saw consolidated adjusted EBITDA of over $2.3 billion and DCF of $1.7 billion. The net loss of $3.5 billion was primarily due to noncash derivative impacts from IPM agreements, which are expected to unwind. The increased full-year 2026 guidance reflects the improved production forecast, higher marketing margins, and locked-in contributions from optimization activities. Despite minimal open exposure for the rest of the year, the guidance range accounts for potential variability from production, timing of📎 new trains, and Henry Hub volatility.

    AI-generated summary of the company’s earnings call. Not investment advice.