Last week a federal judge sided with the natural gas industry. You see, the Biden administration had issued an order blocking new permits for LNG export terminals and pipelines.
In response, Louisiana and 16 other states sued in an attempt to block the Biden administration from halting these permits
The states won.
This is a big win for the oil and gas industry though it won’t change the industry tomorrow. It doesn’t mean that LNG projects will be approved right away. It does mean that the old approval process can continue.
The Federal Energy Regulatory Commission has already approved around 20 proposed new or expanded LNG facilities and related pipelines. This ruling means these are back on the table.
This is a good thing. Cheap energy is good for business and good for high-paying jobs. LNG is also less polluting than coal so it’s also good for the environment. In addition, it is beneficial to our NATO allies who are getting hit by the Russian sanctions.
We should be pushing for more natural gas not less.
One company that liked the news was Cheniere Energy (LNG).
Cheniere Energy is a liquid gas exporter. The company owns the Sabine Pass LNG terminal in Louisiana and the Corpus Christi LNG terminal near Corpus Christi, Texas.
According to the company’s website:
“The company also owns Creole Trail pipeline, a 94-mile natural gas supply pipeline that interconnects the Sabine Pass LNG Terminal with several interstate and intrastate pipelines; and operates Corpus Christi pipeline, a 21.5-mile natural gas supply pipeline that interconnects the Corpus Christi LNG terminal with various interstate and intrastate natural gas pipelines. It is also involved in the LNG and natural gas marketing business.”
The company last reported earnings on May 3, 2024.
LNG had revenues of $4.3 billion and net income of $0.5 billion. They reconfirmed the full-year EBITDA guidance of $5.5-$6 billion. They also bought back 7.5 million shares for $1.2 billion and paid back $150 million in long-term debt.
If you like LNG you will also like Cheniere Energy Partners L.P. (CQP) which serves as the general partner of the company. The difference as far as I can tell is that CQP pays a 7% dividend and LNG pays a 1% dividend.
It should be noted that there is a difference between an LP and a “regular dividend company. Part of that LP dividend is classified as a “return of investment” instead of a dividend and will be taxed as a capital gain.
Regardless, with Trump looking like a shoo-in for the November election, it is a good bet that his hydrocarbon-friendly administration will be beneficial to the oil and gas industry as well as their shareholders.
All the best,
Christian DeHaemer
Outsiderclub.com
https://seekingalpha.com/article/4254535-cheniere-difference-cqp-and-lng-takeover-candidates
https://www.outsiderclub.com/selling-nvidia/
