Cheniere Energy Is Up More Than 100% and May Go Higher
NEW YORK (TheStreet) -- Shares of Cheniere Energy
Other energy players in the industry are also looking to capitalize on the growing demand of LNG from the international markets, but Cheniere Energy is way ahead. The two new liquefaction plants, also called trains (5 and 6), will add to the company's earnings in the coming years.
Cheniere Energy was adding 1.4% to $43.65 in mid-day trading, extending its 2013 advance to 133%.
More importantly, the business will reap benefits of favorable market fundamentals in the next several years. Although Cheniere's investors might not witness a triple digit growth in their 2014 holdings, the shares will continue their rally.
Bechtel on Corpus Christi
On Dec. 9, Cheniere signed two contracts with Bechtel Corp., the U.S.'s leading construction company, to perform engineering, procurement and construction of Cheniere's LNG trains and other facilities in Corpus Christi, Texas. The deal is worth approximately $9.5 billion.
The Corpus Christi liquefaction project includes three LNG trains, each with an annual production capacity 4.5 million tons. Besides the trains, storage tanks and two berths will also be constructed.
Before the announcements of the Bechtel contract, Cheniere revealed that it has entered into a 20-year agreement with Indonesia's state-owned company, Pertamina Corp, under which, the latter will buy 0.8 million tons of LNG each year, once the Corpus Christi project comes online.
This, which is a first agreement for Corpus Christi, I believe, is a clear indication of the growing demand of LNG from the energy-hungry nations of Asia that will fuel Cheniere's growth for decades. The business has already entered into long-term agreements related to its Sabine Pass facility with several Asian buyers such as India's GAIL Ltd., and South Korea's Korea Gas Corp (KOGAS).