Cheniere Energy, Inc. (LNG Quick QuoteLNG - Free Report) recently inked a 20-year liquefied natural gas (LNG Quick QuoteLNG - Free Report) deal with Malaysian state-owned energy company Petronas. Per the deal, Petronas will be supplied with 1.1 million tons of LNG per year from Cheniere’s sixth train under the Sabine Pass LNG terminal. While the financial details of the deal have been kept under wraps, the agreement does spur momentum of the sixth train under the Sabine Pass, which is presently being commercialized with necessary regulatory approvals. The deal is likely to support the company’s final investment decision on the train 6 in 2019.

 

Being the first company to receive Federal Energy Regulatory Commission’s (FERC) approval to export LNG from its 2.6 billion cubic feet per day Sabine Pass terminal in Cameron Parish, LA, Cheniere definitely enjoys a distinct competitive advantage. As it is, the company has been exporting LNG from the Sabina Pass since 2016. While four trains under the Sabina Pass project are already functional, train 5 is undergoing commissioning and set to become fully operational early next year. 

 

Just a week before, Cheniere achieved a major milestone with the dispatch of the first cargo from its Corpus Christi liquefaction (CCL) project. Under the CCL project, Cheniere intends to develop three trains, each having a nominal production capacity of 4.5 million metric tons of LNG per year. While the first train is likely to come online this year or early next year, the second and third trains are expected to be operational within the second half of 2019 and in 2021, respectively. Notably, the CCL project is the third export facility in the United States that produces LNG, after Cheniere’s Sabina Pass and Dominion Energy, Inc.’s (D Quick QuoteD - Free Report) Cove Point terminal.

 

Importantly, Cheniere currently exports to around 30 countries worldwide, as the firm aims at turning the natural gas glut in the United States into export revolution. The company, being one of the few LNG exporters of the United States, shipped more than 190 LNG vessels on a year-to-date basis, marking a solid y/y increase of 43%. It posted robust year-over-year results in the last reported quarter.

 

Cheniere looks well positioned to maintain its revenue growth trajectory over the coming years, on the back of solid operations and long-term contracts. Of late, the company has entered into long-term sale and purchase agreements with CPC and Vitol, which bode well for revenue and growth prospects of the firm, thereby helping LNG generate excellent cash flow visibility for investors. As it is, Cheniere has been witnessing a consistent improvement in revenues over the past few years. Over the last 3 years (2015-2017), the Zacks Rank #3 (Hold) company’s revenues recorded a CAGR of 354.6%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Meanwhile, investors interested in the energy space can consider Cabot Oil and Gas Corporation and SilverBow Resources Inc. (SBOW Quick QuoteSBOW - Free Report) , each sporting a Zacks Rank #1. 

 

 

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