The four shippers tend to have high fixed-rate contract coverage and limited spot market exposure, which the firm says should insulate them from near-term market weakness and outperform more spot-oriented companies such Golar LNG (GLNG) and Gaslog (GLOG).
Credit Suisse notes that GLNG has the least contract coverage in the group but is hunting bigger game than point-to-point LNG transportation - i.e. floating LNG operations, where securing a contract could be a game changer; Morgan Stanley thinks GLNG's first such commercial agreement will be signed this year.
Under the proposal, the Department of Energy would no longer issue conditional approvals of projects; instead, the DoE would decide whether an LNG export project is in the national interest only after the FERC had issued a final environmental review.
The change to the export process aims to help expedite reviews by focusing only on most commercially viable projects that have finished the FERC process.
P-E firm LNG Partners sought a court-sanctioned reorganization for the Douglas Channel LNG project in October after it effectively ran out of money; the owners now are poised to chop the venture in two as part of efforts to resolve a dispute with other investors in the project.
Under a proposed deal, AltaGas would head up a British Columbia project, while Haisla First Nation, a Douglas Channel joint venture, would develop a separate project with Golar LNG (GLNG, GMLP).
The original export license, awarded in 2012, gives the venture permission to export up to 1.8M metric tons/year of natural gas.
GasLog (GLOG +4.7%) is initiated with an Overweight rating and a $26 price target while gas shipping peer Golar LNG Partners (GMLP -3.6%) is downgraded to Equal Weight with a $33 target at Morgan Stanley.
GLOG offers relatively low downside, having most of its fleet locked in solid long-term charters with strong counterparties and a reputation as a top quality operator, the firm says; GLOG's ability to identify attractive acquisition opportunities, not only by ordering newbuilds but also secondhand vessels, suggests stable growth potential.
The firm sees lower upside for GMLP due to the anticipated difficulty of its parent, Golar LNG (GLNG +1%), to secure long-term contracts for its newbuilds during the next 12 months; however, even with the $33 price target, GMLP still offers 10%-15% total return including a 6.7% yield.
Golar LNG Partners (GMLP -6.2%) is defended at Clarkson Capital, which reiterates its Outperform rating and $38 price target after GMLP reveals plans to offer 5.1M units; parent Golar LNG (GLNG +0.4%) will sell 3.4M GMLP units as part of the offering.
The acquisition of the Golar Igloo from GLNG was expected before the vessel begins service on a five-year contract to Kuwait National Petroleum in March 2014, the firm says; the transaction value is in-line with expectations, and the firm believes GMLP has solid distribution growth potential and strong unit coverage.
Golar LNG Partners (GMLP) -4.5% AH after announcing a public offering of 3.9M common units; Golar LNG Ltd. (GLNG) will purchase $12.4M of units in a private placement to close concurrently with the public offering. GMLP plans to use net proceeds to fund part of its purchase of LNG carrier Golar Maria.
Golar LNG Partners LP owns and operates FSRUs and LNG carriers under long-term time charters. The Company operates in three lines of business: LNG Transportation, Floating Storage & Regasification Unit and Floating Liquefaction.