Despite recent upside momentum that has seen shares of Cheniere Energy (LNG 0.99%) jump over 71% since mid-September and news that the company reached a deal with Bechtel to build new liquefied natural gas (LNG) assets, there could be some headwinds for the company. First, those new assets won't be operational until 2018. Second, the issue that could freeze Cheniere's stock really comes down to global shale developments, which could challenge the economics of building infrastructure for LNG and shipping it via sea. Finally, investors have been expecting the debut of the Cheniere Energy Partners LP (CQP +0.83%) IPO so this may be a sell-the-news event for shares of LNG once the deal comes to market officially.
Uncertainty over the future of LNG and a long timetable for investors to see real results may give this stock indigestion.
About the Author
John Licata is the Founder & Chief Energy Strategist of Blue Phoenix Inc. and the author of “Lessons from Frankenstorm: Investing for Future Power Disruptions”, a 2013 Wiley e-book on the future of energy post Sandy. His ability to cross-pollinate idea generation and analysis of both traditional and unconventional global energy markets has been documented in the global media for north of a decade by the likes of Bloomberg, CNBC, BNN, Yahoo! Finance, Reuters Insider and Fox Business Channel.
John is a proven Strategist with over fifteen years of commodity research experience and unique content creation which has made him a highly sought out public speaker for viewpoints related to the future of energy. Prior to launching Blue Phoenix Inc. in 2005, John held research and trading positions at Dow Jones, Salomon Smith Barney, BrokerageAmerica and on the floor of the New York Mercantile Exchange (NYMEX).
John graduated from Saint Peter’s University with a B.S. in Economics and he received his M.B.A. from the Executive MBA Program at NYU’s Leonard N. Stern School of Business.