Cheniere(CQP) - 2024 Q4 - Annual Report

Regulatory Approvals and Compliance - The Sabine Pass LNG Terminal has received FERC approvals for a total of 1,661.94 Bcf/yr for both FTA and non-FTA countries, with a DOE approved volume of 33 mtpa for each category[26] - In October 2024, the DOE authorized the export of an additional 899 Bcf/yr to FTA countries for the SPL Expansion Project, effective upon the first commercial export[26] - The SPL Expansion Project is pending regulatory approval from the FERC and DOE for non-FTA export[47] - The FERC's jurisdiction includes regulation of rates, construction, and operation of LNG terminals, which impacts the company's operational costs[34] - The company is subject to extensive regulatory requirements, including compliance with the PHMSA for safety standards and inspections[48] - The Sabine Pass LNG Terminal is subject to various environmental regulations, which may impose substantial penalties for non-compliance and increase operational costs[55] - The company anticipates capital expenditures for air pollution control equipment due to the Clean Air Act, but does not expect a material adverse effect on operations[56] - The EPA's recent regulations on methane emissions will require monitoring at compressor stations, but the company believes these will not materially impact operations[58] Operational Capacity and Customers - The operational regasification capacity of the Sabine Pass LNG Terminal is approximately 4 Bcf/d, with an aggregate LNG storage capacity of about 17 Bcfe[30] - Major customers contributing 10% or more of total consolidated revenues include BG Gulf Coast LNG (22%), Korea Gas Corporation (15%), and GAIL (India) Limited (15%) for the year ended December 31, 2024[31] - The company has initiated commercial delivery for ten out of eleven third-party long-term SPA customers as of December 31, 2024[27] - The company has secured long-term natural gas supply agreements to support its Liquefaction Project and planned expansions[27] Market Demand and Competition - Global demand for LNG is projected to increase by approximately 61%, from 418 million tons per annum (mtpa) in 2023 to 675 mtpa in 2040[69] - Wood Mackenzie forecasts a need for an additional 142 mtpa of LNG production by 2040 and about 227 mtpa by 2050 to meet market demand[69] - Competition for new SPAs will be based on price per contracted volume and attributes such as reliable production and customer-focused operations[71] Workforce and Corporate Strategy - As of December 31, 2024, Cheniere and its subsidiaries had 1,714 full-time employees, including 501 supporting the Sabine Pass LNG Terminal operations[78] - The company has collaborated on life-cycle assessment models and emissions quantification to enhance its climate strategy and transparency[75] Financial Instruments and Risk - The ultimate fair value of the company's derivative instruments is uncertain and may be subject to material changes due to commodity price volatility[253] - The company has limited exposure to oil price movements due to long-term sales and purchase agreements (SPAs) that generate fixed and variable fees[70]