|Cheniere Energy Partners, L.P. subsidiary, Sabine Pass Liquefaction, LLC|
He predicts he will eventually be able to export two billion cubic feet of liquefied natural gas a day from his facility, or about 3 percent of current domestic gas production. So far, investors like his ideas and have rewarded Cheniere’s stock with a modest purchases. At today’s prices, companies would be able to buy American gas at $4.35 per million British thermal units, and then sell the same gas in Europe or Asia for roughly double that price, since long-term contracts globally are still largely tied to high benchmark oil prices.
New drilling techniques [hydraulic fracturing] have opened up vast shale rock fields to gas prospecting over the last few years, bolstering domestic production and adding significant reserves. That has made the import terminal a disappointment. Meant to receive 30 tankers a month, it only received a dozen all of last year. Much of that business was simply temporarily storing gas for re-export.
Morgan Stanley, ENN Energy of China, Gas Natural Fenosa of Spain, Sumitomo of Japan and EDF Trading of France have entered into memorandums of understanding with Cheniere to reserve processing capacity for export. Some influential investors, like the Blackstone Group, which invested $250 million in the form of a convertible debt security in the company in 2008, one of its largest share owners. (NYT, 1/27/2011)