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    LNG
    Earnings call· Dec 2024(Q4 FY24)

    Cheniere Energy, Inc. LNG

    Feb 20, 2025 Source

    Executive summary

    Cheniere Q4 FY24 — Strong Performance, Stage 3 Progress, and Expanded Growth Ambitions

    Cheniere delivered strong Q4 and full-year 2024 results, driven by record LNG production and operational excellence. The company is advancing its Corpus Christi Stage 3 project ahead of schedule, with Train 1 producing its first cargo, and is actively pursuing permits for significant brownfield expansion at both sites to potentially double capacity. Management is optimistic about a more constructive regulatory environment for U.S. LNG, reinforcing its long-term growth strategy and capital allocation plan.

    Highlights

    5

    • Generated consolidated adjusted EBITDA of $6.155 billion for FY24, exceeding the high end of original guidance by $155 million.

    • Achieved distributable cash flow of $3.73 billion for FY24, $300 million above the high end of original guidance.

    • Produced a record 45 million tons of LNG in 2024, representing over 10% of global supply, with top quintile safety performance.

    • Repurchased 13.8 million shares for $2.3 billion in 2024, increasing share repurchase authorization by $4 billion through 2027.

    • Corpus Christi Stage 3 Train 1 achieved first LNG in December 2024 and first full cargo in February 2025, ahead of schedule.

    Concerns

    5

    • Geopolitical conflicts (Russia-Ukraine)

    • Market volatility

    • Project delays and system outages limiting supply growth

    • Depleting gas resources in legacy supply areas

    • Tax code changes (IRS transition guidance, corporate alternative minimum tax)

    Guidance & targets

    14
    CategoryTargetConfidence
    Consolidated Adjusted EBITDA
    $6.5 billion to $7 billion
    high materiality
    High
    Distributable Cash Flow
    $4.1 billion to $4.6 billion
    high materiality
    High
    CQP Per Unit Distributions
    $3.25 to $3.35
    medium materiality
    High
    LNG Production
    47 million to 48 million tons
    high materiality
    High
    Corpus Christi Stage 3 Train 1 Substantial Completion
    by the end of the first quarter
    high materiality
    High
    Corpus Christi Stage 3 First 3 Trains Ramp Up Production
    by year-end of this year
    high materiality
    High
    Corpus Christi Stage 3 All 7 Trains Substantially Complete
    by the end of 2026
    high materiality
    High
    Corpus Christi Trains 8 & 9 FID
    this year
    high materiality
    High
    Dividend Growth
    10% annually
    medium materiality
    High
    Share Repurchase Authorization
    $4 billion
    high materiality
    High
    Run Rate Distributable Cash Flow
    over $20 per share
    high materiality
    High
    Unsold Capacity for Remainder of 2025
    1.5 million to 2 million tons
    medium materiality
    High
    Impact of $1 Market Margin Change on 2025 EBITDA
    $75 million to $100 million
    medium materiality
    High
    Sabine Pass Expansion FID
    earliest late '26, maybe even or more likely '27
    high materiality
    Medium

    Operational metrics

    62
    Consolidated Adjusted EBITDA
    $1.6 billion
    Q4 FY24

    Generated consolidated adjusted EBITDA of approximately $1.6 billion.

    Consolidated Adjusted EBITDA
    $6.155 billion$155 million above high end of original guidance
    FY24

    Full year EBITDA landed in the middle of our recently increased guidance range and $155 million above the high end of the original range provided a year ago.

    Distributable Cash Flow
    $1.1 billion
    Q4 FY24

    Generated distributable cash flow of approximately $1.1 billion in the fourth quarter.

    Distributable Cash Flow
    $3.73 billion$300 million above high end of original guidance
    FY24

    On DCF, we delivered results above the most recent range and $300 million above the high end of the original range.

    Net Income
    $977 million
    Q4 FY24

    Net income in the fourth quarter totaled approximately $977 million.

    Net Income
    $3.25 billion
    FY24

    Net income in the fourth quarter totaled approximately $977 million and $3.25 billion for the year.

    LNG Production Volume
    45 million tonsrecord amount
    FY24

    We produced a record amount of LNG in 2024, approximately 45 million tons.

    Global LNG Supply Share
    over 10%
    FY24

    which is over 10% of the global LNG supply in the year.

    Sabine Pass Labor Hours without Lost Time Incident
    11 million
    FY24

    SPL achieved 11 million labor hours... without a single lost time incident.

    Corpus Christi Labor Hours without Lost Time Incident
    7 million
    FY24

    Corpus Christi achieved 7 million labor hours without a single lost time incident.

    Capital Allocation Plan Deployment
    $5.4 billion
    FY24

    In 2024, we deployed approximately $5.4 billion towards the key pillars of the plan.

    Capital Allocation Plan Target
    $20 billion$14 billion deployed to date
    by 2026

    allocated nearly $14 billion of our $20 billion target by 2026.

    Shares Repurchased
    13.8 million
    FY24

    repurchased approximately 13.8 million shares.

    Share Repurchase Value
    $2.3 billion
    FY24

    for approximately $2.3 billion.

    Dividend Increase
    15%
    FY24

    increased the dividend by 15% to $2 per share annualized.

    Dividend Declared
    $1.87
    FY24

    declared $1.87 per common share in dividends for 2024.

    Dividends Paid
    $400 million
    FY24

    paid over $400 million in dividends during the year.

    Targeted Payout Ratio
    approximately 20%
    long-term

    We remain committed to our targeted payout ratio of approximately 20% over time.

    Long-term Indebtedness Repaid
    $350 million
    Q4 FY24

    repaid $350 million... of outstanding long-term indebtedness.

    Long-term Indebtedness Repaid
    $800 million
    FY24

    repaid... $800 million of outstanding long-term indebtedness.

    SPL 2025 Notes Remaining Principal
    $300 million
    as of Q4 FY24

    only $300 million of principal remaining on the SPL 2025 notes.

    CapEx for Future Growth & Debottlenecking
    $400 million
    FY24

    deployed approximately $400 million in 2024 towards future growth and debottlenecking.

    Costs Locked In for Midscale Trains 8 & 9
    $300 millionof approximately $0.5 billion total
    as of Q4 FY24

    To date, we have funded over $300 million of the approximately $0.5 billion of costs that Jack mentioned we locked in for mid-scale Trains 8 and 9.

    Consolidated Cash Balance
    $3 billion
    as of Q4 FY24

    With approximately $3 billion in consolidated cash.

    LNG Volumes Recognized
    615 TBtu
    Q4 FY24

    recognized in income 615 TBtu of physical LNG, which included 605 TBtu from our projects and 10 TBtu sourced from third parties.

    LNG Volumes Recognized
    2,349 TBtu
    FY24

    recognized in income... 2,349 TBtu of physical LNG, which included... 2,325 TBtu from our projects and 24 TBtu sourced from third parties.

    LNG Volumes Sold under Long-term Contracts
    92%
    Q4 FY24

    Approximately 92%... of our LNG volumes recognized in the respective periods were sold in relation to term SPA or IPM agreements.

    LNG Volumes Sold under Long-term Contracts
    96%
    FY24

    Approximately... 96% of our LNG volumes recognized in the respective periods were sold in relation to term SPA or IPM agreements.

    TTF Monthly Settlement Price
    $10.90over 20% lower than '23 average
    FY24 average

    TTF monthly settlement prices averaged around $10.90 MMBtu in '24, over 20% lower than the '23 average of about $13.70 an MM.

    TTF Monthly Settlement Price
    $13.70
    FY23 average

    the '23 average of about $13.70 an MM.

    JKM Monthly Settlement Price
    $11.80over 25% lower versus '23
    FY24 average

    the settlement price for JKM averaged $11.80 an MMBtu in '24, over 25% lower versus '23.

    Henry Hub Settlement Price Change
    17% lower
    FY24 vs FY23

    Average Henry Hub settlement price was 17% lower in '24 compared to '23.

    Europe LNG Imports Decline
    19%down over approximately 22 million tons
    FY24 YoY

    Europe's imports declined 19% year-over-year, down over approximately 22 million tons.

    Europe Gas-fired Power Generation Decline
    10%
    FY24 YoY

    gas-fired generation fell 10% year-on-year.

    Europe Gas-fired Power Generation Increase
    15%
    Q4 FY24 YoY

    gas-fired generation, which rose 15% year-on-year during the fourth quarter.

    Europe Underground Storage Deficit
    17 bcmbelow pre-war 5-year average and comparable period last year
    as of Q4 FY24

    bringing inventory levels below the pre-war 5-year average and roughly 17 bcm below the comparable period last year.

    Asia LNG Imports Added
    20 million tonsup 8% year-on-year
    FY24

    Asia added over 20 million tons of LNG imports, up 8% year-on-year to 283 million tons.

    Asia LNG Imports Total
    283 million tons
    FY24

    Asia added over 20 million tons of LNG imports, up 8% year-on-year to 283 million tons.

    China LNG Imports Growth
    10%
    FY24 YoY

    China was the most significant contributor to this growth, increasing 10% to 78 million tons.

    China LNG Imports Total
    78 million tons
    FY24

    China was the most significant contributor to this growth, increasing 10% to 78 million tons.

    China Overall Gas Demand Growth
    8%
    FY24

    China's overall gas demand grew roughly 8% across all major sectors.

    China Transportation Gas Demand
    15 million to 16 million tons
    FY24

    transportation, which reached an estimated 15 million to 16 million tons in '24.

    China Gas Power Generation Capacity Added
    19 GW
    FY24

    added 19 gigawatts of capacity in '24.

    China Gas Power Generation Capacity Added
    10.3 GW
    FY23

    builds on the 10.3 gigawatts that were added in '23.

    China Total Installed Gas Power Generation Capacity
    145 GW
    as of FY24

    for a current total of 145 gigawatts of installed gas power generation capacity.

    China Regas Capacity Added
    24 million tons per annuman increase of 20%
    FY24

    installed an incremental 24 million tons per annum of regas capacity an increase of 20%.

    China Underground Storage Capacity Added
    141 Bcf
    FY24

    an additional 141 Bcf or 4 bcm of underground storage capacity.

    China Estimated Total Underground Storage Capacity
    953 Bcf
    as of FY24

    estimated total of 953 Bcf or 27 bcm as of the end of '24.

    Asia Pacific Gas Demand Growth
    2.8%representing incremental demand of approximately 11 Bcf a day
    FY24 YoY

    growing at a rate of 2.8% year-on-year, representing incremental demand of approximately 11 Bcf a day.

    LNG Market Additional Supply Required
    230 MTPA
    next decade

    require an additional estimated 230 MTPA of LNG supplies in the coming decade.

    LNG Portfolio Contracted Percentage
    over 90%
    long-term

    keeping our platform over 90% contracted with creditworthy counterparties.

    LNG Portfolio Contracted Percentage
    approximately 95%
    through mid-2030s

    averaging approximately 95% contracted through the mid-2030s.

    LNG Cargoes to Europe
    86%record amount
    January

    U.S. sent a record amount of volume to Europe. 86% of our cargoes in January went to Europe.

    Non-coincident Demand
    over 600 million tons
    historical

    We've trotted out the number in the past of over 600 million tons, and this is a historical number of noncincident demand by markets.

    Regas Capacity Added
    over 400 million tons
    by 2030

    Over 400 million tons of regas capacity will be added to the current over 1,000 million tons by 2030.

    Current Regas Capacity
    over 1,000 million tons
    current

    Over 400 million tons of regas capacity will be added to the current over 1,000 million tons by 2030.

    Equinor Estimate of Additional LNG Cargoes for Europe
    350
    null

    if I can quote Equinor one more time, its estimate is an additional 350 cargoes of LNG.

    Unlevered Return Target for Projects
    10%
    null

    it comes back to these economics that we want to earn a 10% unlevered return.

    CapEx to EBITDA Target for Projects
    around 7x
    null

    which we back into being around 7x CapEx to EBITDA before leverage.

    Corpus Christi Acquired Property Size
    500 acres
    null

    we recently acquired 500 acres of property contiguous to our Corpus Christi site.

    Corpus Christi Additional LNG Production Potential
    somewhere around 20 million tons
    long-term

    on that site, we could probably, on a clean sheet of paper, have somewhere around 20 million tons of additional LNG production.

    Leverage Target
    under 4x
    during construction

    staying around under 4x leverage even during construction going forward.

    Industry KPIs

    3
    MetricValueDetails
    FCF shareholder distributions$3.73 billionUSD
    Take or pay contract structureover 90%%
    Distributable cash flow per unit share$3.25 to $3.35USD/unit

    Orderbook & backlog

    2
    Share Repurchase Authorization$4 billionlast summer

    increased

    increased our share repurchase authorization last year by $4 billion through 2027.

    Unsold Capacity1.5 million to 2 million tonsremainder of 2025

    reduced from 3-4 million tons

    forecast approximately 1.5 million to 2 million tons of unsold capacity for the remainder of 2025. Of the approximately 3 million to 4 million tons of spot capacity for 2025 guided to on the last call, the C&I team has now locked in almost 2 million tons at attractive market netbacks.

    Capital programs

    2
    Corpus Christi Stage 3underway
    Period spend: $220 million (Q4 2024), $1.5 billion (FY 2024)
    Spent to date: over $4.5 billion

    Benefit: 7 trains

    At year-end, total completion stood at 77.2% with the construction across the entire project at over 42% complete. Train 1 achieved first LNG in December and first full cargo in February. All equipment for Trains 1-7 procured and delivered.

    Corpus Christi Midscale Trains 8 & 9nearing final regulatory approvals
    Spent to date: over $300 million (of $0.5 billion locked in)

    Benefit: 2 trains

    The project is nearing the final regulatory approvals required in order to reach FID, and we remain on track to reach FID on this brownfield expansion this year. We recently placed orders for long lead time items to ensure we can continue our construction efforts without delays upon receipt of the remaining necessary permits. To date, we have funded over $300 million of the approximately $0.5 billion of costs that Jack mentioned we locked in for mid-scale Trains 8 and 9 and related infrastructure.

    Risks & headwinds

    5
    Geopolitical conflicts (Russia-Ukraine)last 3 years

    tremendous impact on global energy markets

    Mitigation: Cheniere's LNG stands as an ideal and powerful solution for energy security, diversity, and reliability.

    Market volatilitygoing forward

    very volatile commodity market going forward

    Mitigation: highly contracted business model

    Project delays and system outages limiting supply growthlast year (2024)

    Global LNG trade grew by less than 4 million tons year-on-year

    Mitigation: Cheniere's Stage 3 project is ahead of schedule, aiming to meet future demand.

    Depleting gas resources in legacy supply areas

    Depleting gas resources for LNG in legacy supply areas such as Egypt, Algeria, Trinidad and even Australia have far outweighed gains in other areas.

    Mitigation: structurally supportive of demand for LNG supply in the future for Cheniere.

    Tax code changes (IRS transition guidance, corporate alternative minimum tax)this year and going forward

    impact the timing and amount of our cash tax payments

    Mitigation: should be immaterial on an NPV basis and not impact our ability to generate over $20 billion of available cash through 2026.

    What to watch in Q1 FY25

    5

    Corpus Christi Stage 3 Train 1 operational status

    next quarter (Q1 FY25)
    CurrentFirst full cargo produced in February 2025.
    TargetOperational by end of Q1 2025.

    Why it matters

    Verifies the accelerated schedule and contributes to 2025 production and financial guidance.

    We were proud to achieve first LNG back in December, an important milestone that helps reinforce our forecast time line for Train 1 to reach substantial completion by the end of the first quarter. ... I'm pleased to share that this week, we completed production of our first full cargo of LNG from the Stage 3 project.

    Q&A highlights

    8

    Has the geopolitical situation altered Cheniere's view on U.S. LNG's path or affected long-term contract discussions, especially with European customers?

    Jack Fusco emphasized praying for world peace but noted that energy security and diversity are critical for national stability, a point highlighted by the war. Anatol Feygin added that Europe's need for LNG is clear, with 86% of Cheniere's January cargoes going to Europe. He noted a favorable geopolitical environment in the U.S. and Europe's aim to cease Russian energy imports, reinforcing the value of reliable, destination-flexible U.S. LNG.

    “energy security in general and natural gas, in particular, have been prioritized over the last several years, accelerated by geopolitical conflicts in multiple theaters that have refocused government on the long-term importance of natural gas.”

    asked by Theresa Chen · answered by Jack Fusco

    2 min read6 chapters

    Detailed Narrative

    01

    Operational Excellence and Safety

    Cheniere emphasized its record LNG production of 45 million tons in 2024, representing over 10% of global supply, achieved while successfully completing turnarounds at both Sabine Pass and Corpus Christi. The company maintained a top quintile safety performance, with SPL achieving 11 million labor hours and Corpus Christi 7 million labor hours without a lost time incident. This focus on performance underpins the company's reputation as best in class.

    02

    Corpus Christi Stage 3 Progress

    Construction and commissioning of Corpus Christi Stage 3 are ahead of schedule, with total completion at 77.2% and construction over 42% complete at year-end. Train 1 achieved first LNG in December 2024 and produced its first full cargo in February 2025. All equipment for Trains 1-7 has been procured and delivered, mitigating import tariff risks. The first three trains are targeted to ramp up production by year-end 2025, with all seven trains substantially complete by the end of 2026.

    03

    Growth Optionality and Permitting

    The company is actively pursuing permits for significant growth at both Sabine Pass and Corpus Christi, aiming for over 90 million tonnes per annum total permitted capacity. Management noted a more constructive and predictable permitting environment under the new administration, which is seen as a strategic imperative to de-risk future project development. This includes leveraging brownfield advantages and a recently acquired 500-acre property contiguous to Corpus Christi with potential for 20 million tons of additional LNG production.

    04

    LNG Market Dynamics

    The global LNG market remained relatively tight in 2024 due to limited supply growth and strong demand outside Europe, leading to elevated spot prices (TTF averaged $10.90/MMBtu, JKM averaged $11.80/MMBtu). Europe's LNG imports declined 19% year-over-year but saw increased demand in Q4 due to winter weather and declining Russian gas flows. Asia, particularly China, drove significant LNG demand growth, with China's imports up 10% to 78 million tons and substantial investments in gas infrastructure, including 19 GW of new gas power capacity in 2024.

    05

    Capital Allocation Strategy

    Cheniere deployed $5.4 billion towards its 2020 Vision capital allocation plan in 2024, including $2.3 billion in share repurchases and $800 million in debt repayment. The company aims to achieve over $20 per share of run rate distributable cash flow and plans to continue 10% annual dividend growth, maintaining a targeted payout ratio of approximately 20%. The company has $3 billion in consolidated cash and ample undrawn revolver and term loan liquidity to fund future CapEx, including over $2 billion planned for Stage 3 and Mid-scale 8/9 in 2025.

    06

    Geopolitical Context

    Management acknowledged the impact of the Russia-Ukraine conflict on global energy markets, highlighting the criticality of secure and reliable energy supply. They expressed optimism for peace and noted that a resolution could rebalance gas markets and support long-term demand growth for natural gas and LNG. The U.S. is seen as having a significant opportunity to provide reliable energy supply globally, with 86% of Cheniere's January cargoes going to Europe to help meet demand.

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