Quarterly report [Sections 13 or 15(d)]

Derivative Instruments (Tables)

v3.26.3
Derivative Instruments (Tables)
 9 Months Ended
Sep. 30, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Fair Value of Derivative Assets and Liabilities
The following table shows the fair value of our derivative instruments that are required to be measured at fair value on a recurring basis, distinguished by the fair value hierarchy levels prescribed by GAAP (in millions):
Fair Value Measurements as of
September 30, 2026 December 31, 2025
Quoted Prices in Active Markets
(Level 1)		 Significant Other Observable Inputs
(Level 2)		 Significant Unobservable Inputs
(Level 3)		 Total Quoted Prices in Active Markets
(Level 1)		 Significant Other Observable Inputs
(Level 2)		 Significant Unobservable Inputs
(Level 3)		 Total
Liquefaction Supply Derivatives liability(1)
$ —  $ (4) $ (117) $ (121) $ —  $ (23) $ (500) $ (523)
(1)As described in Note 1—Nature of Operations and Basis of Presentation, in June 2026, we designated the NPNS scope exception for our IPM agreements. As a result, these agreements ceased to be accounted for as derivative instruments, with the then-current carrying amounts of the related derivative assets and liabilities reclassified to the applicable financial statement line items described in Note 1—Nature of Operations and Basis of Presentation. These agreements are therefore no longer included in the fair value amounts presented as of September 30, 2026. As of December 31, 2025, these agreements had a fair value of $394 million, classified as a liability within Level 3 of the fair value hierarchy. Accordingly, the reduction in Level 3 fair value balances between the periods reflects, in part, the exclusion of these agreements following the June 2026 NPNS designation, in addition to market movements, settlements and other fair value activity.
Fair Value Measurement Inputs and Valuation Techniques The following table includes quantitative information for the unobservable inputs for the Level 3 Liquefaction Supply Derivatives as of September 30, 2026:
Net Fair Value Liability
(in millions)
 Valuation Approach Significant Unobservable Input
Range of Significant Unobservable Inputs / Weighted Average(1)
Liquefaction Supply Derivatives $(117) Market approach incorporating present value techniques
Henry Hub basis spread
$(0.568) - $0.275 / $(0.036)
(1)Unobservable inputs were weighted by the relative fair value of the instruments.
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation
The following table shows the changes in the fair value of the Level 3 Liquefaction Supply Derivatives (in millions):
Three Months Ended September 30, Nine Months Ended September 30,
2026 2025 2026 2025
Balance, beginning of period $ (106) $ (1,147) $ (500) $ (1,307)
Realized and change in fair value losses included in net income(1):
Included in cost of sales, existing deals(2)
(14) (93) (198) (7)
Included in cost of sales, new deals(3)
(35) (2) (38) (12)
Purchases and settlements:
Purchases(4)
—  —  —  — 
Settlements(5)
37  60  98  147 
Transfers out of level 3(6)
1  (2) 1  (5)
Agreements designated as NPNS and no longer measured at fair value on a recurring basis(7)
—  —  520  — 
Balance, end of period $ (117) $ (1,184) $ (117) $ (1,184)
Unfavorable changes in fair value relating to instruments still held at the end of the period
 $ (49) $ (95) $ (90) $ (19)
(1)Does not include the realized value associated with derivative instruments that settle through physical delivery, as settlement is equal to the contractually fixed price from trade date multiplied by contractual volume. See settlements line item in this table.
(2)Impact to earnings on deals that existed at the beginning of the period and continue to exist at the end of the period, and on the NPNS-designated agreements prior to the designation date, as further described in Note 1—Nature of Operations and Basis of Presentation.
(3)Impact to earnings on deals that were entered into during the reporting period and continue to exist at the end of the period.
(4)Includes any day one gain (loss) recognized during the reporting period on deals that were entered into during the reporting period, which continue to exist at the end of the period.
(5)Roll-off in the current period of amounts recognized in our Consolidated Balance Sheets at the end of the previous period due to settlement of the underlying instruments in the current period.
(6)Transferred out of Level 3 as a result of observable market for the underlying natural gas purchase agreements.
(7)Represents the removal of agreements from Level 3 recurring fair value measurements upon the NPNS-designation in June 2026, as further described in Note 1—Nature of Operations and Basis of Presentation.
Derivative Instruments, Gain (Loss)
The following table shows the effect and location of the Liquefaction Supply Derivatives recorded on our Consolidated Statements of Operations (in millions):
Gain (Loss) Recognized in Consolidated Statements of Operations
 Consolidated Statements of Operations Location(1)
Three Months Ended September 30, Nine Months Ended September 30,
2026 2025 2026 2025
LNG revenues $ (1) $ —  $ —  $ — 
Cost of sales(2)
3  (12) (140) 109 
(1)Does not include the realized value associated with the Liquefaction Supply Derivatives that settle through physical delivery. Fair value fluctuations associated with our derivative activities are classified and presented consistently with the item economically hedged and the nature and intent of the derivative instrument.
(2)Includes gains and losses from the NPNS-designated agreements prior to the designation date, as further described in Note 1—Nature of Operations and Basis of Presentation.
Fair Value of Derivative Instruments by Balance Sheet Location
The following table shows the fair value and location of the Liquefaction Supply Derivatives on our Consolidated Balance Sheets (in millions):
Fair Value Measurements as of
Consolidated Balance Sheets Location September 30, 2026 December 31, 2025
Current derivative assets $ 3  $ — 
Derivative assets 1  541 
Total derivative assets 4  541 
Current derivative liabilities (84) (164)
Derivative liabilities (41) (900)
Total derivative liabilities (125) (1,064)
Derivative liability, net $ (121) $ (523)
Derivative Net Presentation on Consolidated Balance Sheets
The following table reconciles the fair value of our derivative assets and liabilities on a gross basis, by contract, to net amounts as presented on our Consolidated Balance Sheets after offsetting for any balances with the same counterparty under master netting arrangements or other relevant netting criteria under GAAP (in millions):
Liquefaction Supply Derivatives
September 30, 2026 December 31, 2025
Gross assets $ 28  $ 663 
Offsetting amounts (24) (122)
Net assets $ 4  $ 541 
Gross liabilities $ (160) $ (1,084)
Offsetting amounts 35  20 
Net liabilities $ (125) $ (1,064)
Derivative Liability, Subject to Master Netting Offset, Collateral
The table below shows the collateral balances that are recorded within other current assets, net and other current liabilities that are not otherwise offset against derivative assets and liabilities on our Consolidated Balance Sheets (in millions):
Consolidated Balance Sheets Location September 30, December 31,
2026 2025
Liquefaction Supply Derivatives Other current assets, net $ 10  $ 11 
Liquefaction Supply Derivatives Other current liabilities —  (3)