Cheniere Energy Partners (CQP) is scheduled to release its earnings for 2Q15 on July 29. Its stock closed at $32.15 on July 14.
Analyzing CQP’s stock since the beginning of this year, we see that the stock has given returns of about -1.3%. It did cross into positive return territory recently, as the graph above notes, but it’s currently trading closer to January’s levels.
However, CQP overperformed both the Energy Select Sector SPDR ETF (XLE)—the benchmark energy sector ETF—and the Alerian MLP ETF (AMLP)—the benchmark MLP or Master Limited Partnership ETF. XLE and AMLP have given negative returns of 6.3% and 9.6%, respectively, since January this year.
CQP has also overperformed its parent, Cheniere Energy (LNG), which has given returns of about -4% since January. So CQP’s performance was better than LNG’s, XLE’s, and AMLP’s. AMLP gave the worst performance.
You can explain LNG’s poor performance with the plunge that liquefied natural gas prices have taken. The price of spot liquefied natural gas for July delivery to Northeast Asia averaged $7.6 per million British thermal units (MMBtu) according to the latest Japan and Korea Marker data published by Platts, an energy pricing agency. According to Platts, these levels are 41% lower than a year ago.
Though the company does face some uncertainties and risks, its take-or-pay contracts have ensured a firm grounding and positive growth prospects for Cheniere Energy Partners.
Cheniere Energy Partners is a publicly traded master limited partnership. It was created by Cheniere Energy (LNG), which owns 100% of Cheniere Energy Partners’ general partner—Cheniere Energy Partners GP. Cheniere Energy Partners is in the process of constructing liquefied natural gas facilities. It should become the first exporter of liquefied natural gas from the lower 48 US states. We’ll discuss these facilities in greater detail in the following parts of this series. Other future exporters include Chevron (CVX) and Sempra Energy (SRE).
The following part of this series analyzes Cheniere Energy Partners’ historical performance.