Image source: Getty Images.

This past year marked a pivotal point for Cheniere Energy (NYSEMKT:LNG), which went from an LNG project developer to a leading LNG exporter. This transformation was the culmination of years of work and billions of dollars in investment. It also represented the company's biggest win this year.

Embarking on a new frontier

In February, Cheniere Energy announced that its master limited partnership, Cheniere Energy Partners (NYSEMKT:CQP), had commissioned the first cargo from the first liquefaction train of its Sabine Pass liquefaction project in Louisiana, which the company started building in Aug. 2012. That first cargo headed to Brazil on a vessel chartered by Cheniere as part of a test of the company's LNG terminal. It was a historic shipment for the company and the country as it marked the first export cargo of domestically produced gas, which transformed both from natural gas importers to exporters.

The company announced the full commissioning of that first LNG train in May when the project developer turned over care, custody, and control to Cheniere Energy Partners. After several more test runs, the company started deliveries under a 20-year sale and purchase agreement with Royal Dutch Shell (NYSE:RDS.A)(NYSE:RDS.B) subsidiary BG Group in November.

Meanwhile, Cheniere announced the completion of the second train in September, which will likewise export gas under a 20-year contract. Its contract with Gas Natural Fenosa, though, does not officially commence until next August.

That said, just because Cheniere is not collecting revenue from these contracts does not mean these assets are sitting idly. During the third quarter, Cheniere Energy Partners loaded 18 LNG cargos, including three as part of the commissioning of train 2. The company used the income from these shipments to help defray some of the commissioning costs.

Image source: Getty Images.

More wins on the way

While 2016 marked a turning point for Cheniere Energy, the company still has work to do because it has a total of six trains under development at Sabine Pass. The company started construction on trains 3 and 4 in 2013 and was 91.8% complete as of the end of the third quarter. It expects to finish construction on both trains next year and already started commissioning train 3 this past September. Meanwhile, it began construction on train 5 in 2015, which was 42.8% complete at the end of the third quarter and it should go into service in 2019. Finally, it has a sixth train under development at Sabine Pass, though it has yet to start construction.

In addition, Cheniere Energy has a five-train development underway in Texas. It commenced construction on the first two trains of its Corpus Christi project last May and was 43% complete with the project at the end of last quarter, which puts it on pace to finish in 2019. Meanwhile, it has started development on train 3, though it has yet to commence construction. Finally, it is developing trains 4 and 5 at Corpus Christi, though these phases have yet to be approved by regulators.

As these phases come on line over the next few years, they will transform Cheniere Energy into one of the world's premier LNG exporters. More importantly, these assets should provide the company with very stable cash flow because it has already locked up 87% of the capacity under construction to firm 20-year take-or-pay contracts. Meanwhile, it has ample growth opportunities to expand its current facilities as well as to build additional facilities in support of increasing demand for natural gas across the globe.

Investor takeaway

The completion of the first two trains of Cheniere Energy's LNG export projects was a huge win for the company. After four years of hard work, the company will finally be able to see a tangible return on the capital it invested in the project. That said, this was just the first step for Cheniere, which has plenty of work left to do as it finishes up construction on its leading LNG export franchise.

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