Cheniere Energy: A Way To Profit From Lower Natural Gas Prices (Seeking Alpha)
Natural gas is very cheap in North America while still relatively expensive overseas. Until recently, there was only one LNG export facility authorized in the US, which was the Sabine Pass LNG terminal in Cameron Parish, Louisiana, which is owned and operated by Cheniere Energy, Inc. (NYSEMKT:LNG) and its affiliates. Cheniere Energy has been one of the hotter stocks in the market with YTD gains of over 60%. Cheniere Energy’s corporate structure is rather complicated. Its main asset is obviously the Sabine Pass LNG terminal. However, Cheniere Energy Partners (CQP) has 100% interest in this project. Cheniere Energy Partners is an MLP, of which Cheniere Energy, Inc. (NYSEMKT:LNG) owns 54.4% of the units and general partner incentive distribution rights, or IDRs.
In 2008, a Houston-based energy company saw an enormous opportunity. However, new hydraulic fracturing (fracking) technology changed the rules of the game. All of a sudden, natural gas was plentiful and cheap. As a result, gas prices plummeted. Since then, things have turned around for Cheniere Energy, Inc. (NYSEMKT:LNG). In fact, the stock has gained an astonishing 2,568% since bottoming out five years ago.
In December 2011, StreetAuthority resources expert Nathan Slaughter recommended Cheniere Energy, Inc. (NYSEMKT:LNG) to the subscribers of his Junior Resource Advisor newsletter. Three months later, the stock had more than doubled. Well, instead of letting its new Sabine Pass import facility in Louisiana sit and rust, the company set to work securing contracts and refitting the facility for the export of natural gas. By 2016, this facility is expected to export 500 million cubic feet of natural gas per day.
Cheniere Energy Given a $38.00 Price Target by Credit Suisse Analysts (LNG) (Daily Political)
Equities researchers at Credit Suisse set a $38.00 target price on shares of Cheniere Energy stock in a report issued on Monday, Stock Ratings Network reports. Cheniere Energy opened at 30.60 on Monday. Cheniere Energy, Inc. (NYSEMKT:LNG) has a 1-year low of $10.51 and a 1-year high of $30.95. The stock’s 50-day moving average is currently $27.87. The company’s market cap is $6.598 billion.
Natural Gas Climbs to Three-Week High on Outlook for Hot Weather (Businessweek)
Natural gas futures advanced to the highest settlement price in almost three weeks on forecasts for above-normal temperatures that would boost demand for the power-plant fuel to run air conditioners. In May 2011, the department conditionally approved Cheniere Energy, Inc. (NYSEMKT:LNG)’s Sabine Pass LNG Terminal in Louisiana for a rate of as much as 2.2 billion cubic feet a day. The project won FERC approval in April of 2012. The government has weighed 20 applications for export terminals in recent months, which could ship the equivalent of 41 percent of U.S. total production this year, Energy Department data show. The U.S. may export 6.5 billion to 8.5 billion cubic feet a day of gas by 2020, Adam Longson, an analyst at Morgan Stanley in New York, said in an e-mailed report today.
Gas Export Approval Not Seen Signaling U.S. Permit Flood (Bloomberg)
The conditional approval of a natural gas export terminal in Texas doesn’t necessarily open the floodgates for overseas sales as the U.S. weighs how best to use its growing energy resources. The U.S. Energy Department said yesterday that exports from the Freeport LNG project, partly owned by Dow Chemical Co. (DOW) and Osaka Gas Co. (9532), according to the venture’s website, offered net economic benefits and reflected the “transformative impact” of record gas production from hydraulic fracturing in shale rock formations. In addition to the Freeport project, the agency has already approved Cheniere Energy, Inc. (NYSEMKT:LNG)’s Sabine Pass export terminal in Louisiana. “The four facilities, we believe, have a good chance of going forward,” said Manabe, lead author of a Moody’s report issued May 1 on the prospects for natural gas exports.
