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Cheniere Advances Corpus Christi Expansion Amid Tightening LNG Outlook, RBC Says

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Cheniere Energy (LNG) is moving closer to a final investment decision on its Corpus Christi LNG expansion after issuing a limited notice to proceed on Phase 1 of its Sabine Pass Liquefaction expansion project, RBC Capital Markets strategists said in a note on Wednesday.

RBC analysts said the move on the SPL Train 7 expansion was slightly ahead of investor expectations, noting that the engineering, procurement, and construction agreement with Bechtel effectively locks in pricing of about $4.68 billion for over 6 million tons per annum of capacity.

The analysts said most of the cost reflects labor, consistent with the project's brownfield nature.

Cheniere is targeting permit approvals by the end of 2026, with FID expected in early 2027. The energy firm said the expansion is already commercially complete, with permitting remaining the main gating item.

On contracting, Cheniere said it has not yet fully commercialized Corpus Christi Train 4 but continues to see a constructive environment for long-term LNG agreements.

The company said counterparties are seeking shorter-term supply in the near term due to geopolitical disruptions, while maintaining interest in longer-term portfolio diversification.

RBC said Cheniere's management also reiterated a positive view on global LNG fundamentals, arguing that current TTF pricing does not fully reflect supply constraints and demand shifts, including delays to Qatar's North Field expansion and temporary outages at QatarEnergy facilities.

Cheniere said the disruptions have pushed expectations of LNG oversupply out by one to two years as demand continues to absorb incremental capacity.

The US LNG producer said it remains well positioned as one of the few regions capable of adding meaningful new global liquefaction capacity.

On capital allocation, RBC said Cheniere management prefers share buybacks over significant dividend increases, citing greater flexibility and the potential for opportunistic repurchases.

Price: $238.75, Change: $+3.38, Percent Change: +1.43%

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