Private equity firms have their eyes set on the energy sector, with deals such as El Paso-Apollo Global, Samson Investment-KKR, and the most recent between Cheniere Energy Partners
The journey so far...
Falling natural gas prices in the U.S. due to a supply glut have made companies look to export gas in the form of liquid natural gas. And with LNG in Europe and Asia fetching four to six times what natural gas gets in the U.S., that explains why Cheniere chose to expand its import terminal to allow for exports. In fact, the terminal will be the first such facility in the U.S. in 40 years.
With natural gas in abundance, U.S. oil companies are really eager to tap the burgeoning LNG market overseas. And Sabine Pass being the first such facility definitely puts Cheniere ahead of the lot.
The Department of Energy's approval and new export contracts toward the end of 2011 started pumping life into the Sabine Pass terminal. The first up was the one with Britain's BG Group, then came Spain's Gas Natural Fenosa, along with India's GAIL pitching in as well. All these deals are long-term, ranging from 20-30 years, which means the project is locking in a good amount of its capacity. In fact, Cheniere has even got Chesapeake
...and the hope for the future
Cheniere Energy Partners and its parent, Cheniere Energy
The Blackstone investment has made investors more confident of the terminal's future -- and the company's, too. Things are falling in place for Cheniere in time, and it looks all ready to lead U.S. LNG into exports. Keep a tab on this stock as the story unfolds on your personalized Watchlist.
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Fool contributor Lavina Mangat does not own shares of any of the companies mentioned in this article. Motley Fool newsletter services have recommended buying shares of Chesapeake Energy. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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