Cheniere begins permit process for Sabine Pass LNG expansion

Top U.S. LNG exporter Cheniere Energy Inc posted a quarterly profit that zoomed past Wall Street estimates and said it has begun the permit process to expand capacity at its key Sabine Pass plant in Louisiana.

Shares of the company surged 8% to $159.71 in afternoon trade.

Cheniere and its units have started the pre-filing review process with the Federal Energy Regulatory Commission for the proposed Sabine Pass stage 5 expansion project, which is being designed for an LNG production capacity of about 20 MMtpy, it said.

Demand for U.S. liquefied natural gas soared last year, as Europe needed vast amounts of gas to reduce its reliance on Russia imports, which used to make up nearly 40% of its supplies, following sanctions on Moscow.

LNG exports were key to helping Europe rebuild its gas stockpiles after Russia's invasion of Ukraine disrupted supplies. U.S. supplies will be more important this year with Russian deliveries to Europe largely cut.

"Despite the retreat of global gas prices to prewar levels beginning in the fourth quarter and into 2023 on the back of a mild winter and demand reduction efforts in Europe... expect volatility to remain elevated as Europe sorts out its near- and long-term gas supply strategies," Anatol Feygin, Cheniere's chief commercial officer said on a call.

Cheniere said LNG volumes loaded for the reported quarter rose 11% to 600 trillion British thermal unit (TBtu) from last year.

The company sees 2023 consolidated adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) between $8 billion and $8.5 billion and expects distributable cash flow of $5.5 billion to $6 billion.

The Texas-based company posted net income attributable to common stockholders of $3.94 billion, or $15.78 per share. This cruised past analysts' estimates $5.79 per share, as per Refinitiv data. Cheniere also beat fourth-quarter revenue estimates.

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