Many investors have had their interest piqued by the ongoing conversation about liquefied natural gas, or LNG, exports. As far as stock market opportunities go, the only company in the U.S. with all the necessary approvals for such exports is Cheniere Energy, Inc. (NYSEMKT:LNG). If you haven’t been following the company, you may have some questions not only about Cheniere Energy, Inc. (NYSEMKT:LNG) itself, but also about how it fits into the global LNG picture. That’s why we created a premium report on the company, to help guide investors on whether or not Cheniere Energy, Inc. (NYSEMKT:LNG) merits consideration for their portfolios.
Below is an excerpt from the report, laying out three areas investors need to watch in the coming years. We hope you enjoy.
The Key Areas You Must Watch
The success of Cheniere is based almost entirely on world gas markets, particularly the Asian market. Japan and South Korea are the number one and number two importers of LNG in the world. Japan alone accounts for 33% of the world LNG market, and its demand for the fuel is only expected to permanently decrease its dependency on nuclear power. In the wake of Fukushima, Japanese LNG imports immediately increased from 3.4 trillion cubic feet to 3.8 trillion cubic feet. China is expected to quadruple its natural gas consumption by 2020, and the International Energy Agency anticipates it doubling from there by 2035. And even though China is sitting on shale gas resources that some estimate are 50% more than those in the United States, the country has minimal water resources and a dearth of pipeline infrastructure, both key factors that may stymie its ability to develop its natural gas deposits in a meaningful way.
Time is a crucial factor here as well. Cheniere Energy, Inc. (NYSEMKT:LNG) plans to begin exporting LNG from its first train at Sabine Pass by the very end of 2015 and the second train following shortly after. Two more trains are expected to come online in the following year. The company’s Corpus Christi liquefaction facility is targeting a 2017 in-service date. Right now, Cheniere is on schedule to meet these goals and needs to remain that way. The world gas markets can be affected by numerous factors over that time period, some of which may benefit Cheniere, others of which may hurt the company’s margins. The longer the gas takes to get to market, the larger the question mark becomes.