Cheniere Energy, Inc. (NYSEMKT:LNG) is the only company in the U.S. that has FERC approval to export liquefied natural gas, and one of only two companies with Department of Energy approval to send it to countries with, or without, a free-trade agreement with the U.S. This is a coveted position; Cheniere Energy, Inc. (NYSEMKT:LNG) is not only a first mover, right now it is the only mover.
This status makes Cheniere Energy an intriguing play for investors. If you haven’t been following the company forever, you may have some questions. That’s why I 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.
Following is an excerpt from the report, laying out the company’s opportunity. We hope you enjoy it.
Cheniere Energy is currently on the third iteration of its business plan. Initially conceived as an exploration and production company, Cheniere Energy, Inc. (NYSEMKT:LNG) eventually decided the real money was in the importing and degasification of liquid natural gas, or LNG. The takeoff of domestic natural gas production illuminated that it was, in fact, not where the money was, so Cheniere’s management opted to try its hand at natural gas export instead. The current disparity between the price of natural gas in the U.S. and the price of gas in Europe and Asia makes this a very compelling idea right now, and Cheniere’s third act is a quest to exploit those margins. Fortunately, the company’s assets are located right where export assets need to be, and if everything goes according to plan, Cheniere Energy, Inc. (NYSEMKT:LNG) could be exporting gas to the world as early as the end of 2015.
The company’s Sabine Pass liquefaction facility is technically owned by master limited partnership Cheniere Energy Partners. Cheniere has a 61% stake in this MLP, which also owns the very much underused Sabine Pass import facility.
Located on Louisiana’s Gulf Coast, the liquefaction project at Sabine Pass is designed to ultimately export about 27 million tons per year of liquefied natural gas. Close proximity to a number of shale plays in Texas and the Haynesville Shale in Louisiana, means that Sabine Pass is perfectly situated for exports.
Getting an export facility up and running is not cheap, however; Cheniere Energy, Inc. (NYSEMKT:LNG) had to find $5.7 billion to finance the development of the first two LNG trains at Sabine Pass. The first and second trains are under construction, with train one scheduled to come online toward the end of 2015, and train two coming online six to nine months after that. Trains three and four have received all necessary federal approvals and Cheniere has entered into a lump sum turnkey EPC contract with Bechtel, and is working to secure financing and make a final investment decision. If everything goes as planned, construction will begin in 2013 .