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$3.97 -0.32 (-7.46%)
8/21/2008 4:00 PM

Cheniere Energy, Inc. (LNG)

CAPS Rating:
**

The Company is engaged primarily in the business of developing and constructing, and then owning and operating, a network of three onshore LNG receiving terminals, and related natural gas pipelines, along the Gulf Coast of the United States.

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Avatar snoopyj (40.68) Submitted: 11/17/06 4:12 PM : Outperform Start Price: $28.58 LNG Score: -77.43

Cheniere Energy Inc has an estimated 2,500 trillion cubic feet of stranded natural gas waiting to be recovered. This translate to a huge revenue opportunity. Terminals are close to major U.S. natural-gas pipelines as well as Texas and Lousiana, the first- and third- largest natural gas consumers in the U.S., respectively. Cheniere Energy will also have stakes in some of the first operational facilities in the Gulf Coast. This comes from production expected to begin in 2008 from the Sabine Pass and Freeport terminals. The company has been successful in preselling to large customers, including ConocoPhilips, Chevron, Total, and Dow Chemical.

The long-run fundamentals of the natural gas supply and demand in the U.S. are the key drivers for the company's revenues. The Sabine Pass terminal is expected to expand to between 2.6 - 4.0 billion cubic feet per day. Utilization of Sabine Pass is expected to be approximately 60% and 100% for Freeport. With many of these terminals still in production and not expected to complete in the near future, there remains high uncertainty for the company's prospects in the short run.

Target Price: $51.00
52 Wk High: $44.40 (-36.2%)
52 Wk Low: $24.72 (14.6%)

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