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Key Highlights From Cheniere Energy’s 3Q16 Earnings Release

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Part 4
Key Highlights From Cheniere Energy’s 3Q16 Earnings Release PART 4 OF 5

What Strategic Initiatives did Cheniere Energy announce in 3Q16?

Cheniere Energy’s market performance

In this article, we’ll look at the strategic initiatives Cheniere Energy (LNG) announced along with its 3Q16 earnings release, as well as its YTD (year-to-date) market performance.

What Strategic Initiatives did Cheniere Energy announce in 3Q16?

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Cheniere Energy closed 1.2% higher following its 3Q16 earning release. At the same time, Cheniere Energy Partners (CQP), LNG’s subsidiary, was up 1.3%. Cheniere Energy has fallen 1.7% since the beginning of 2016. In comparison, the Alerian MLP ETF (AMLP), which comprises 26 midstream energy MLPs, has fallen 0.8%. LNG’s peers, Energy Transfer Equity (ETE) and Dominion Resources (D), have risen 2.0% and 9.9% in 2016.

Cheniere Energy’s strategic initiatives

Cheniere Energy announced two important strategic initiatives along with its 3Q16 earnings.

  • It announced a midscale LNG (liquefied natural gas) solution, which includes smaller modular LNG trains. The company has awarded a FEED (Front End Engineering Design) contract to a consortium of companies. The company stated that “The FEED process will help us to assess the cost benefits, if any, of building liquefaction trains using a modular and more standardized approach to drive capital costs lower through off-site controlled environment manufacturer of significant components.”
  • It announced a gas pipeline solution. The company is developing a 340-mile pipeline to transport natural gas from the STACK1 and SCOOP2 plays in Central Oklahoma to Northeast Texas. The pipeline would have a total takeaway capacity of 1.4 Bcfpd (billion cubic feet per day). The company stated that “the pipeline will help to serve the gas needs of both the Sabine Pass and Corpus Christi LNG terminals by connecting the STACK and SCOOP basins into existing Sabine and Corpus Christi contracted and owned pipeline infrastructure.”

In the next article, we’ll look at what Wall Street analysts recommend for Cheniere Energy and its subsidiaries.

  1. Sooner Trend, Anadarko basin, and Canadian and Kingfisher counties
  2. South Central Oklahoma oil province
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