Why Cheniere Energy Benefits from Addition of New Markets
Global LNG demand
Three of the world’s largest LNG (liquefied natural gas) importers are Japan, South Korea, and China. They experienced a decline in LNG demand in 2015. According to the EIA (U.S. Energy Information Administration), total imports of LNG by these three nations “declined by an average of 1.0 billion cubic feet per day ([or] Bcf/d) ([or] 5%) in 2015, as compared to 2014, and averaged 18.5 Bcf/d.” However, this decline was slightly offset by the addition of new markets.
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The United States is expected to become the third largest supplier of LNG by 2020. Cheniere Energy (LNG), Kinder Morgan (KMI), and Energy Transfer Equity (ETE) benefit directly from the addition of new markets.
According to a Cheniere Energy investor presentation, “New markets, such as Egypt and Jordan, benefitted from installing FSRUs.” The above graph shows the increase in FSRUs (floating storage regasification units) as a percentage of total regasification over the last ten years.
In the final part of our series, let’s see what analysts are recommending for Cheniere Energy.