Cheniere and Shell deliver carbon-neutral US LNG to Europe

(Reuters) – U.S. liquefied natural gas company Cheniere Energy Inc said on Tuesday it was supplying carbon-neutral cargo to Royal Dutch Shell as part of a long-term deal, joining a list of emission-neutralizing sellers then as more and more buyers commit to meeting environmental goals.

“I believe providing climate solutions to our customers will be an increasingly important part of our business,” Cheniere CEO Jack Fusco said on the company’s first quarter earnings conference call. .

The carbon neutral LNG cargo was supplied from the Sabine Pass plant in Cheniere, Louisiana and delivered to Europe in early April, with offsets purchased from Shell’s global portfolio of nature-focused projects.

Consumers are increasingly paying a premium to have wellhead emissions offset by consumption. In March, Russian energy giant Gazprom PAO announced that it had delivered its first carbon-neutral shipment to Europe. Pavilion signed a long term contract with Chevron Corp CVX.N earlier this year and one with Qatar Petroleum late last year which requested data on greenhouse gas emissions. Last year, China National Offshore Oil Corp, or CNOOC, purchased its first carbon-offset cargoes from Shell.

Cheniere bolstered its annual forecast on Tuesday after posting a 40% increase in first-quarter profits from a year ago, with EBITDA of $ 1.5 billion. The company increased its annual forecast by 4.5%, with expected profits now ranging from $ 4.3 billion to $ 4.6 billion.

“The continued strength of global LNG market fundamentals, along with the strong first quarter results we reported today, improve our outlook for the remainder of the year and allow us to improve our financial forecast for the year 2021, ”said Fusco.

Improving market margins also helped bolster the distributable cash flow forecast, now expected to be between $ 1.6 billion and $ 1.9 billion this year, the company said.

Cheniere’s revenue rose to $ 3.09 billion in the first quarter, from $ 2.71 billion a year earlier, with the company selling larger volumes at lower prices.

Chenière exported a record 133 LNG shipments during the quarter, despite part of its facilities down for a few days during the winter storm in February.

Spot prices for June delivery in Asia are above $ 9 per million British thermal units (mmBtu), down from around $ 2 a year ago.

“The structural tightening that we have been anticipating for some time is now underway,” commercial director Anatol Feygin said in the same call.

Net income increased $ 18 million in the quarter to $ 1.54 per share, from $ 1.43 per share in the first three months of 2020.

Cheniere operates three LNG processing units, called trains, at its Corpus Christi terminal, including the third train which was substantially completed on March 26, with a total annual LNG production capacity of around 15 million tonnes.

Its sixth Sabine train is almost a year ahead of schedule and could start production before the end of the year, Fusco said.

Reporting by Sabrina Valle; Edited by Edmund Blair, Bernadette Baum, Alexandra Hudson

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