How Does Cheniere Measure Up?
Investors are always seeking the next best stock. There has been talk that Cheniere has been looking pretty perfect these days. No stock is perfect, but how good is Cheniere really looking? Dan Caplinger takes a look at the details.
The boom in natural gas production has left the U.S. with a challenge: what to do with the glut of natural gas? Cheniere and its subsidiary, Cheniere Energy Partners (AMEX: CQP ) , are at the forefront of a potential solution to that problem: exporting it in the form of liquefied natural gas, or LNG. With Cheniere working to expand its existing Sabine Pass terminal to become a bi-directional facility — currently it only handles imported LNG — the company could help boost gas demand and get LNG to places like Asia where it’s needed most.
Although the project won’t be complete for several years, Cheniere is already putting the pieces in place. Chesapeake Energy (NYSE: CHK ) has committed to supplying gas for export, while Cheniere has also found a buyer for the LNG. It also entered a contract with Bechtel for engineering and construction services on the project.
Cheniere isn’t without competition, though. Apache (NYSE: APA ) , EOG Resources(NYSE: EOG ) , and EnCana (NYSE: ECA ) have put together an LNG export joint venture. But although it’s further along with permitting than Cheniere, the joint venture doesn’t yet have customers. Royal Dutch Shell (NYSE: RDS-A ) also expects to build a similar LNG export facility.
Looks like Cheniere has a lot of work to do in order to become a stock of perfection. They have to reach the current goals they have set, which seem to be a ways off. It has potential but isn’t there quite yet.
Quotes taken from report by Dan Caplinger, Read the entire article here.
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