On April 1, Dominion submitted a 12,000-page application to federal regulators to build a $3.4 billion plant in southern Maryland to export LNG. The company has deals with energy companies in Japan and India that would purchase the gas. Dominion is third on the list of 21 exporters awaiting Energy Department-approval. Two privately owned companies, Freeport LNG and Lake Charles Exports, are ahead of it.
Shares of Cheniere Energy, Inc. (NYSEAMEX:LNG) jumped more than 20% when the Sabine Pass terminal was approved in April 2012. Cheniere Energy now trades around $25 to $26, and Cheniere Energy Partners trades at a lower volume, but about the same price. If and when Dominion can begin to export, look for its stock to do the same!
Other companies to watch
The Golden Pass LNG Terminal sits near Sabine Pass, Texas, and is owned by Golden Pass LNG, a joint venture formed Qatar Petroleum (70%), Exxon Mobil Corporation (NYSE:XOM) (17.6%) and ConocoPhillips (NYSE:COP) (12.4%). The Golden Pass application is currently in 14th place awaiting Energy Department-approval. However, the project received approval in October 2012 to export domestic LNG to FTA countries.
Earlier this year, ExxonMobil, ConocoPhillips (NYSE:COP) and BP plc (ADR) (NYSE:BP) announced plans for a major LNG project to build a natural-gas pipeline in Alaska to export LNG to Asia. The project could cost as much as $65 billion. The Alaska-to-Asia natural gas pipeline will export natural gas from Alaska’s North Slope 800 miles to the coast. The Alaskan-export project would compete with more than a dozen proposed plants in the U.S. that hope to get federal approval to sell liquefied natural gas to Asia, where gas sells for several times the U.S. price.
ExxonMobil subsidiary ExxonMobil Chemical has not joined ranks with Dow or Huntsman in opposing LNG exports. The subsidiary carries a biased perspective with a stake in both outcomes. However, the president of ExxonMobil Chemical, Steven Pryor, said the following in a speech to the industry
There have been numerous independent studies, including for the Department of Energy, that showed that under all trading scenarios, the economic benefits to the country from LNG exports are significant and clearly outweighed any potential increases in domestic natural gas prices… Free trade is the life blood of the chemical industry. New industry investments in the Middle East, Asia and now North America will increase trade flows, benefiting producers and consumers worldwide… But with this opportunity comes obstacles. The prospects of growing exports often prompt calls for protectionism from competitors seeking to protect their domestic advantage. Protectionist pleas are often wrapped in pious appeals to nationalism, but the real agenda is to unlevel the playing field and stifle the competition. As an industry, we must vigorously oppose protectionist measures that limit access to global markets.
LNG export-approvals could change both the economy and many stocks. The companies poised to pop first are Cheniere Energy Partners LP (NYSEMKT:CQP), and Dominion, but don’t rule out other companies yet. ExxonMobil stands to benefit either way with LNG exports, regardless of its political views on free trade, making it another safe bet for the future.
The article 1 LNG Export Company to Know originally appeared on Fool.com and is written by Erin McBride.
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