Cheniere Energy: A Scary Midstream Stock To Avoid
Value Digger • 72 Comments
Value Digger • 72 Comments
Tue, Jul. 19, 11:38 AM
- Cheniere Energy's (LNG -2%) Sabine Pass liquefied natural gas export plant on the U.S. Gulf Coast will shut down for planned maintenance in September, Reuters reports.
- The Louisiana plant, which began operations in February and has exported 17 cargoes so far, can produce ~4.5M metric tons/year of LNG from its one existing production line; the second LNG train at the plant is expected to enter service by the end of August.
Wed, May 25, 11:39 AM
- Cheniere Energy (LNG +1.9%) plans to begin exporting liquefied natural gas from a second plant at its Sabine Pass terminal in Louisiana in August, based on the current progress being made at the facility.
- "Actual project progress supports the achievement of substantial completion for Trains 1 and 2 by late May 2016 and September 2016, respectively. Trains 3 and 4 targeted substantial completion dates are April 2017 and August 2017, respectively," according to a new FERC filing.
- Cheniere became the first exporter of U.S. shale gas in February with the start of shipments from the first unit at Sabine Pass.
Tue, May 17, 11:59 AM
- South Africa, seeking to reduce its dependence on coal-fired power, is creating a unit to import liquefied natural gas for power plants as suppliers including Cheniere Energy (LNG +1.9%) await fuel tenders for at least 3M tons in annual shipments.
- Bloomberg reports that Cheniere is among companies interested in supplying South Africa’s gas-to-power program, which plans to add 3,126 MW of capacity during 2019-25.
- The new government unit may consider regional gas supplies from Botswana and Mozambique, which expects Anadarko Petroleum (APC +1.8%) and Eni (E -1.1%) to make final investment decisions on LNG export projects later this year.
Thu, May 12, 9:59 AM
- Cheniere Energy (LNG +5.8%) pops higher at the open on news of the appointment of Jack Fusco as its new President and CEO effective immediately, confirming earlier reports.
- Fusco had served as CEO at Calpine (CPN +0.7%) during 2008-14 and was Executive Chairman since 2014; CPN names Frank Cassidy, one of its directors, as its new Chairman.
- Fusco succeeds Neal Shear, a former head of Morgan Stanley’s commodities division who became interim CEO after LNG ousted its founder, Charif Souki, in December.
- Fusco’s target compensation for 2016 will be ~$9M, including a $1.25M salary, $1.56M target bonus and $6.25M long-term incentive that will pay out over three years, and he has agreed to buy $10M worth of LNG stock by Dec. 31; Souki made $54M in his last year with the company.
- The new hire is “a major positive step” for LNG, according to Carl Icahn, who is credited with pushing Souki out.
- Now read Cheniere Energy: An inexpensive natural gas play
Thu, May 5, 4:31 PM
Wed, May 4, 12:49 PM
- Previewing his Ira Sohn appearance set for early this evening, Jim Chanos tells CNBC Cheniere Energy (LNG -4.6%) is an "excessively expensive bet" on liquid natural gas. His appearance prompts a call to the set from Cheniere long Carl Icahn, who tells the group there is no risk to company cash flows.
- As for Valenat (VRX -4.2%), the stock is worth zero if its acquisitions are worth the same price the company paid for them. Bausch & Lomb, for instance, is likely not worth $8B-$9B. Pro forma earnings from Valeant, says Chanos, are "very, very misleading."
Fri, Mar. 4, 2:37 PM
- Cheniere Energy (LNG +3%) is initiated with an Overweight rating and $54 price target at J.P. Morgan, which cites cash flows stemming from blue-chip customer contracts and visible project catalysts.
- JPM credits LNG as the first North American mover, beginning its services two years before the next U.S. peer, which allows the company to have the scale and diversification in the Americas to potentially drive increasing market share, revenue growth and profit margins.
- The firm also highlights LNG’s value driven contracts, which remain favorable as there are no opportunities to change the fixed fees or re-sell contracts for customers, allowing the company to remain a market leader and drive value for shareholders in 2016.
- Cheniere Energy Partners (CQP -3%) and Cheniere Energy Partners (CQH +0.9%) also are initiated at Overweight.
Wed, Feb. 24, 2:14 PM
- The first cargo of U.S. liquefied natural gas exports from the lower 48 states is departing today Cheniere Energy's (LNG +8.1%) Sabine Pass terminal in Louisiana, a company executive says.
- The fuel will be carried to Brazil on the Asia Vision LNG tanker and is expected to be received by Petrobras, according to a recent report from Bloomberg.
- Meg Gentle, LNG’s president of marketing, made the announcement at the IHS Energy CERAWeek conference and called the shipment as among the first steps toward creating a liquid and transparent market for LNG across the globe.
Tue, Feb. 23, 12:24 PM
- Petrobras (PBR -3.9%) is scheduled to receive the first cargo of shale gas to be shipped from Cheniere Energy's (LNG +0.6%) Sabine Pass terminal in Louisiana, Bloomberg reports.
- Demand is forecast to be higher in South America during the spring, in part due to a drought that has increased Brazil’s dependence on LNG as a power-plant fuel.
- Loading the Asia Vision, the LNG tanker that moored at the Sabine Pass over the weekend, may take a few days and the timing of its departure is unclear.
Tue, Feb. 23, 8:58 AM
- Cheniere Energy (NYSEMKT:LNG) +8.8% premarket after Goldman Sachs upgrades shares to Buy from Neutral with a $46 price target, citing an attractive valuation with the stock down 19% YTD.
- LNG's cash flows are low risk as they are supported by 20-year take-or-pay contracts, and two of its seven planned liquefied natural gas trains come online in 2016, the firm says.
- A liquefied natural gas tanker docked at LNG's Sabine Pass terminal in Louisiana over the weekend, and the first export cargo of seaborne gas from the lower 48 states may leave the site by the end of February or early March.
Thu, Jan. 14, 11:47 AM
- Cheniere Energy (LNG, CQP) says it has delayed the first export of liquefied natural gas from its plant at Sabine Pass, La., by about a month until late February or early March, citing “instrumentation issues” discovered during the final phases of plant commissioning that it will work to fix during the next few weeks.
- LNG interim CEO Neal Shear says the company remains ahead of the guaranteed contractual schedule with engineering and construction contractor Bechtel and anticipates meeting all contractual targets and completion dates.
- Cheniere plans to build at least six trains to produce LNG at the ~$15B Sabine Pass project by late 2018, allowing the terminal to supply more than 3.5B cf/day.
- LNG -1.8%, CQP -2.4%.
Dec. 31, 2015, 1:52 PM
- The volatility continues: After getting drubbed yesterday following the release of EIA inventory data, a slew of North American oil/gas industry firms are up strongly today as Nymex natural gas futures rise 6.1% to $2.35/MMBtu. The EIA reported today a weekly U.S. natural gas inventory change of -58 Bcf (close to expectations) to 3,756 Bcf.
- Oil is also higher: WTI crude is up 2.5% to $37.53/barrel, and Brent crude up 3.7% to $37.80/barrel. The S&P is down 0.3%.
- Also: Cheniere Energy (LNG +3.4%) has begun production at its Sabine Pass terminal, which will be the first to export shale gas from the U.S. Partner ING Capital states Cheniere is currently receiving, chilling, and storing 50M cubic feet of gas per day at the facility.
- Major gainers include Southwestern Energy (SWN +9.6%), Williams (WMB +5.6%), Encana (ECA +4.5%), Gulfport Energy (GPOR +5.3%), Whiting Petroleum (WLL +8.2%), Rice Energy (RICE +5.6%), SandRidge Permian Trust (PER +8.9%), Oasis Petroleum (OAS +5.9%), BP Prudhoe Bay Royalty Trust (BPT +7.3%), and Baytex Energy (BTE +9.3%). ONEOK is up over 7% after catching an upgrade from Credit Suisse.
Dec. 14, 2015, 11:24 AM
- Carl Icahn, who last week raised his stake in Cheniere Energy (LNG -1.2%) to 13.83% from 12.65%, praises the company's board for having the "guts" to fire CEO Charif Souki, a move he "fully" supports.
- LNG's board voted this weekend to replace Souki, looking to "clamp down" on the former CEO's goals to expand the company beyond its core business of exporting liquid natural gas, and feeling the need for a more experienced CEO.
- Icahn says Souki is a "talented entrepreneur... [but] there is also little doubt that the board wished to move the company in a direction that differed greatly from the path Souki wanted," and that Souki's plans were "win-win for Souki but not necessarily for the shareholders."
Oct. 26, 2015, 10:29 AM
- CEO Charif Souki tells CNBC he does not believe Cheniere Energy (LNG -2%) will become Europe's leading liquefied natural gas player, believing "Russian gas will still be the dominant player in Europe."
- Export production volumes at its Sabine Pass export terminal are expected at 27M metric tons/year, rising to 60M/year 2025, sparking some talk of whether Cheniere could overcome Russia to become Europe's leading supplier once it begins exporting to the region.
- European countries are courting Cheniere in an attempt to wean themselves off Russian supply; earlier this month, Lithuania's Energy Minister said he was in talks with Cheniere regarding potential imports.
- Gazprom (OTCPK:OGZPY) currently supplies more than 30% of Europe's gas.
Oct. 12, 2015, 12:22 PM
- Cheniere Energy (LNG -5%) tumbles as Jim Chanos tells Bloomberg that the company's plans to export liquefied natural gas from the U.S. will leave it burdened with more than $30B in debt.
- Half of Cheniere’s projected 2020 earnings will depend on how much gas the company can sell into the spot market, Kynikos Associates chief Chanos says, adding that LNG will be on the hook for ~$2B of interest payments annually and its equipment will depreciate by $1B/year.
- Cheniere has said it plans to ship the first cargo of liquefied natural gas from its Sabine Pass terminal in Louisiana in Q4.
- Separately, on Friday the SEC charged a Cheniere VP and a friend with insider trading in the company during 2011 and 2012.
Oct. 7, 2015, 11:59 AM
- Cheniere Energy (LNG +3.8%) reportedly has begun the monthslong process of preparing its $18B Sabine Pass liquefied natural gas export terminal to crank out its first batch of super chilled gas for shipment overseas.
- Sabine Pass LNG began last week bringing in small amounts of natural gas and flaring some off, providing early signs that the first phase of the project is nearing the finish line, according to energy research firm Genscape, which adds that it can take 3-6 months to ready the plant for production once construction is completed.
- The plant is scheduled to become the first large-scale terminal to ship LNG from the continental U.S.
Cheniere Energy, Inc. is engaged in the development, construction and operation of LNG terminals and marketing of LNG and natural gas. The company operates through two segments: LNG terminal and LNG and natural gas marketing. The LNG terminal segment consists of the operational Sabine Pass LNG... More
Sector: Basic Materials
Industry: Oil & Gas Drilling & Exploration
Country: United States
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