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Why CQH Outperformed Cheniere Energy and CQP in 2017

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CQH outperforms

Cheniere Energy Partners LP Holdings (CQH) has risen nearly 15% in 2017. Interestingly, CQH has risen more than Cheniere Energy (LNG) and Cheniere Energy Partners (CQP). In comparison, the Alerian MLP Index has fallen nearly 15%. CQH’s only business consists of owning CQP’s common and subordinated units, representing ~48.6% limited partner interest in CQP as of September 30, 2017. Therefore, CQH is dependent on Cheniere Energy Partners’ performance for earnings.

CQH versus CQP

Even though CQH is an LLC (limited liability company), we’ve included it in the list of MLP gainers, as it offers pure exposure to Cheniere Energy Partners. In addition to the CQP units, CQH owns non-economic voting interest in GP Holdco, which holds 100% indirect interest in Cheniere Energy Partners GP.

CQH’s outperformance of CQP may not be due to a GP (general partner) premium, as is generally the case, because CQH’s interest in the GP is non-economic. One reason for this divergence between CQH’s and CQP’s stock performance could be the larger investor base available to CQH.

Operations

Cheniere Energy Partners owns and operates LNG (liquefied natural gas) regasification facilities, and plans to construct up to six trains with a total production capacity of ~27 million tons per year. Trains 1 through 4 are already operational. Train 5 is under construction, whereas Train 6 is being commercialized and has all necessary regulatory approvals in place.

For an analysis of Cheniere Energy stock’s recent performance, read Cheniere Energy up over 5.0% in November: What’s Next? Next, we’ll discuss another refining MLP that appears in the list of top ten gainers in 2017—CVR Refining (CVRR).

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