Cheniere said on Thursday that net income declined by $3.9 billion during the three months ended March 31, as compared to the same period in 2025.
This was primarily due to $4.8 billion of unfavorable changes in the fair value of agreements accounted for as derivative instruments (before tax and the impact of NCI), largely associated with the company’s long-term IPM (integrated production marketing) agreements.
According to Cheniere, these increased losses were primarily attributable to widening spreads between global and US domestic natural gas benchmarks and elevated global natural gas price volatility influenced in part by the tightening supply conditions, transit constraints, and heightened geopolitical uncertainties from the Middle East conflict and instabilities across parts of the Middle East during 2026.
Partially offsetting these losses was $462 million of favorable change in income tax provision (benefit), the recognition of $370 million in tax credits, and a $225 million decrease in net income attributable to NCI, Cheniere said.
Revenues and operating costs climb
On the other hand, the $424 million increase in total revenues was primarily attributable to $1.3 billion increase primarily due to higher pricing per MMBtu from increased Henry Hub pricing, to which the majority of Cheniere’s long-term LNG sales contracts are indexed, as well as higher volumes of LNG delivered as LNG revenues between the periods.
Cheniere said this was partially offset by $952 million of unfavorable changes in the fair value of agreements accounted for as derivative instruments included in revenues.
Cheniere’s operating costs surged to $9.36 billion in the first quarter from $4.48 billion in the comparable quarter last year.
Cheniere attributed the increase in total operating costs and expenses to $4.2 billion of unfavorable changes in the fair value of agreements accounted for as derivative instruments included in cost of sales indexed to global natural gas and LNG prices, and a $1.2 billion increase in the cost of natural gas feedstock, largely due to the increase in US natural gas prices and increased volume of LNG delivered.
The company said its total volumes delivered reached 682 TBtu in the first quarter, up from 616 TBtu in the same quarter last year.
More to follow..