Houston’s Cheniere Energy faced startup delays in late 2015 and even fired its founder and chief executive just two months before it would become the nation’s first exporter of liquefied natural gas.
“Those were unnerving times,” said Anatol Feygin, Cheniere’s chief commercial officer, of the operational hiccups.
Cheniere, however, moved ahead and succeeded in becoming the nation’s first LNG exporter about a year ago, Feygin said during an interview at the CERAWeek by IHS Markit Conference.
Fast forward to today and 20-year-old Cheniere is finally turning a profit. More LNG liquefaction units, called trains, are coming online at the Sabine Pass terminal near the Texas-Louisiana border.
Late last year, under new CEO Jack Fusco, Cheniere cut some Houston jobs as part of a “modest reorganization” to rein in costs and reduce redundancies, Feygin said. However, those job losses were offset by hiring in Corpus Christi, where Cheniere is building its second LNG export terminal. Cheniere’s overall headcount grew slightly to 911 worker versus 888 employees at the same time last year, according to U.S. Securities and Exchange Commission filings.
Out of six tentatively planned Sabine Pass trains, a third is expected to come online in the coming weeks, while a fourth is slated for the fall. A fifth is expected to be finished in 2019, while the sixth doesn’t yet have a timeline. Each train has the capacity to process 4.5 million metric tons of LNG a year.
The Corpus Christi project is expected to start operations in 2019. The first two Corpus trains are about 50 percent complete, while a third is the next project the company expects to announce, Feygin said. He’s bullish global LNG demand will meet or exceed supplies again in 2021 or so.
Cheniere founder Charif Souki had originally planned on 25 total trains by the end of 2025, but that pursuit, viewed as overly ambitious by some investors, is believed to have got him ousted by activist investor Carl Icahn and his supporters. Souki has since founded Houston-based Tellurian Inc. LNG developer.
While he was forced out just before he could see his “baby” to fruition, he said there’s no malice.. After all, he noted, he remains a Cheniere shareholder.
Cheniere officially became profitable for the first time at the end of last year, turning a $110 million net gain in the fourth quarter.
“The era of U.S. LNG has begun,” Feygin said Wednesday. “Cheniere is not finished yet. The U.S. market is not finished yet.”
Through Cheniere, the U.S. is even about to start exporting Canadian shale gas, because potential Canadian LNG export projects are still years from fruition.
It’s easy to track where the gas supplies are coming from because the big projects take time, Feygin said, but the global demand is fragmented and harder to track. China and India, as expected, led the way in demand, but Jordan, Egypt and Pakistan surprisingly were the next largest LNG consumers last year as Middle Eastern demand picks up. Other markets like Bangladesh and Bahrain are emerging under the radar, he said.