Cheniere Energy's LNG Exports

Written By Brianna Panzica

Posted October 26, 2011

On Wednesday, Cheniere Energy (AMEX: LNG) and BG Group (LON: BG) announced a deal in which BG would export natural gas from Cheniere, the first time that this resource is exported from the U.S. since the start of the shale gas boom.

Cheniere Energy owns liquefied natural gas terminals, and the one in Sabine Pass, Louisiana will feature in this deal.

The terminal is not yet built, but as Reuters reports, Cheniere will use finances from the $8 billion deal to facilitate construction.

According to the Bloomberg report in SF Gate, the Sabine Pass facility will have two liquefaction units that will cool the gas to liquid state.

As Charif Souki, chief executive of Cheniere, told Reuters, the deal will be worth about $410 million a year as Cheniere sells 3.5 million tonnes of liquefied natural gas annually to BG.

The contract is good for 20 years, and once the plant at Sabine Pass is built, as early as 2015, Souki hopes, exports can begin.

Souki talked to Reuters about the gas that will be supplied to this contract:

“We haven’t decided where we will source the gas from.  It will either be from the market or through a supply deal.”

As the article indicates, once the terminal is built it will be able to export up to 9 million tonnes of liquefied natural gas per year.

Companies are searching to export abroad as the shale boom has led to an influx of natural gas in the United States.  Shipping abroad will turn a nice profit.

Asia in particular, Reuters reports, would be a great export market.  The continent is low on fuel supply and relying heavily on imports.

SF Gate reports that Cheniere will not stop at plans with BG.  The company has also planned to export to nations such as Jamaica, Puerto Rico, and the Dominican Republic.

This deal, along with Cheniere’s Sabine Pass facility, will be groundbreaking for the shale gas boom.  It marks the start of U.S. exports of this abundant resource and should provide a boost in national profit.

Shares of Cheniere Energy were up 56.6% in afternoon trading to $9.59.

BG shares also rose 1.2% on Wednesday’s announcement.

That’s all for now,


Angel Publishing Investor Club Discord - Chat Now

Hydrogen Fuel Cells: The Downfall of Tesla?

Lithium has been the front-runner in the battery technology market for years, but that is all coming to an end. Elon Musk is against them, but Jeff Bezos is investing heavily in them. Hydrogen Fuel Cells will turn the battery market upside down and we've discovered a tiny company that is going to make it happen...

Sign up to receive your free report. After signing up, you'll begin receiving the Energy and Capital e-letter daily.