May 7 (Reuters) - Cheniere Energy warned that shipping disruptions tied to the Middle East conflict could tighten global gas supply and keep prices volatile, further pressuring the U.S. LNG producer's earnings and cash flow after it swung to a steep quarterly loss.
Shares slumped 5.3% in premarket trading on Thursday after the company reported a $3.5 billion net loss for the first quarter, hurt by a $4.8 billion unfavorable change in the value of derivative agreements linked to its long-term LNG contracts.
The company had posted a profit of $353 million in the year-ago quarter.
Derivatives are contracts used to hedge against swings in energy prices, but they expose the investor to risks when global gas markets become volatile.
Volatility in global liquefied natural gas markets following the U.S.-Israeli war on Iran is affecting energy companies, even as demand for U.S. LNG exports remains strong.
Cheniere said widening spreads between global and U.S. natural gas benchmarks and elevated global gas price volatility drove the losses.
CEO Jack Fusco had said in March that shocks to the LNG market are harmful to demand growth because higher prices push some countries out of the market, adding that the latest Middle East conflict has underscored the need for supply diversity.
Cheniere said its Corpus Christi Stage 3 export project in Texas was 96.5% complete as of March 31, with first LNG from Train 6 expected imminently.
The company's Train 5, part of a seven-train development expected to add 10 million metric tons per year of export capacity at the Corpus Christi LNG plant, began operating at full capacity in late March.
Its LNG revenue rose nearly 8% to $5.72 billion.
Cheniere raised its 2026 adjusted core profit forecast to between $7.25 billion and $7.75 billion, from its earlier range of $6.75 billion to $7.25 billion, on higher LNG production forecasts and stronger market margins.
(Reporting by Pooja Menon in Bengaluru; Editing by Leroy Leo)
