Cheniere Energy Shares Jumped: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Cheniere Energy (AMEX: LNG  ) rose 12% in early trading after the company announced a 20-year liquid natural gas, or LNG, agreement with Spain's Gas Natural Fenosa.

So what: Gas Natural has committed to buy 3.5 million tons of LNG per year. Sister company Cheniere Partners (NYSE: CQB  ) , through a subsidiary, is in the process of developing a terminal capable of producing 9 million tons of LNG annually. Gas Natural is expected to begin taking deliveries in 2016.

Now what: The agreement follows a similar deal with BP Group, signed earlier this month. Will these arrangements supply enough capital to keep Cheniere from being crushed under the weight of billions in debt? I'm asking you. Would you buy shares of Cheniere Energy at current prices? Please weigh in using the comments box below.

Interested in more information about Cheniere Energy? Add it to your watchlist.

Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team. He didn't own shares in any of the companies mentioned in this article at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Google+ or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

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  • Report this Comment On November 23, 2011, at 10:45 AM, caztx wrote:

    This article should be amended or deleted. Cheniere's (LNG) price spike evaporated before midday and the stock closed with a loss on the day. As a reluctant owner of LNG (from years ago), I just missed the SELL window.

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