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Cheniere executive indicates that China may buy LNG from the company

“There’s a lot of interest from Chinese buyers for long-term LNG volume, especially for 2020 onwards,” Cheniere Vice President for Asia at Cheniere Marketing Pte Ltd Nicolas Zanen, on the sidelines of the Asia Oil and Gas Conference in Kuala Lumpur, told Reuters.

Cheniere Energy (ticker: LNG) is set to become the first U.S. LNG exporter, with shipments slated to start by the end of this year. However, no Chinese companies have signed up for any U.S. LNG cargoes so far, reports Reuters.

“The Chinese market is a very interesting market for us. I wouldn’t be surprised if in the future we are delivering LNG to China. And not necessarily small buyers, big buyers as well,” he said.  Zanen said that some Chinese buyers had already begun moving to secure supplies, although without providing any details.

DOE Warns Freeport LNG Not to Sell LNG to Large Chinese Customers

Freeport LNG, which also has LNG projects under construction, said that it was warned by the Department of Energy not to sign up Chinese customers for LNG from the company’s export terminal in Texas, reports Bloomberg.

“Early on in our project, we were quite frankly warned by the Department of Energy that it would not be looked at as politically correct for us to have a large Chinese customer,” said Freeport CEO Michael Smith. “One of the largest Chinese customers wanted a full [liquefaction] train,” he added.

In return for signing LNG purchase agreements, Chinese buyers demand equity stakes, which they say are required by their lenders, Smith said. Aside from Cheniere’s Sabine Pass terminal, which has an investment from Hong Kong-based RRJ Capital, no U.S. export projects have disclosed Chinese customers.


Click here to listen to OAG360®’s exclusive interview with Cheniere’s SVP Anatol Feygin


According to Cheniere’s 10-K, an aggregate principal amount of $1 billion of convertible unsecured notes due 2021 were issued to RRJ Capital, along with Baytree Investments Pte. Ltd. (based in Mauritius) and Seatown Lionfish Pte. Ltd. (based in Singapore), on a private placement basis. The notes accrue interest at a rate of 4.875% per annum, which is payable in kind semi-annually in arrears by increasing the principal amount of the 2021 notes outstanding.

6 U.S. LNG export facilities get DOE nod to sell LNG to non-free trade foreign buyers

The DOE has given final authorization to six projects, including Freeport’s and Cheniere’s, to export LNG to countries lacking a free trade agreement

Source: Cheniere Energy Corpus Christi LNG Rendering

Source: Cheniere Energy Corpus Christi LNG Rendering

with the U.S. The terminals would have a combined total capacity 8.61 Billion cubic feet per day, or about 12% of current dry gas production.

“Authorizations are granted to companies that apply, not for the countries themselves,” Lindsey Geisler, a spokeswoman for the Energy Department in Washington, said. “The final destinations for LNG cargoes will be dependent upon commercial arrangements and factors, and are only reported to the Department after delivery.”

The only countries that cannot receive exports are those prohibited by U.S. law or policy, she added. Those countries include Crimea, Iran, North Korea, Sudan and Syria.

Important disclosures: The information provided herein is believed to be reliable; however, EnerCom, Inc. makes no representation or warranty as to its completeness or accuracy. EnerCom’s conclusions are based upon information gathered from sources deemed to be reliable. This note is not intended as an offer or solicitation for the purchase or sale of any security or financial instrument of any company mentioned in this note. This note was prepared for general circulation and does not provide investment recommendations specific to individual investors. All readers of the note must make their own investment decisions based upon their specific investment objectives and financial situation utilizing their own financial advisors as they deem necessary. Investors should consider a company’s entire financial and operational structure in making any investment decisions. Past performance of any company discussed in this note should not be taken as an indication or guarantee of future results. EnerCom is a multi-disciplined management consulting services firm that regularly intends to seek business, or currently may be undertaking business, with companies covered on Oil & Gas 360®, and thereby seeks to receive compensation from these companies for its services. In addition, EnerCom, or its principals or employees, may have an economic interest in any of these companies. As a result, readers of EnerCom’s Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this note. The company or companies covered in this note did not review the note prior to publication. EnerCom, or its principals or employees, may have an economic interest in any of the companies covered in this report or on Oil & Gas 360®. As a result, readers of EnerCom’s reports or Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.


Important disclosures: The information provided herein is believed to be reliable; however, EnerCom, Inc. makes no representation or warranty as to its completeness or accuracy. EnerCom’s conclusions are based upon information gathered from sources deemed to be reliable. This note is not intended as an offer or solicitation for the purchase or sale of any security or financial instrument of any company mentioned in this note. This note was prepared for general circulation and does not provide investment recommendations specific to individual investors. All readers of the note must make their own investment decisions based upon their specific investment objectives and financial situation utilizing their own financial advisors as they deem necessary. Investors should consider a company’s entire financial and operational structure in making any investment decisions. Past performance of any company discussed in this note should not be taken as an indication or guarantee of future results. EnerCom is a multi-disciplined management consulting services firm that regularly intends to seek business, or currently may be undertaking business, with companies covered on Oil & Gas 360®, and thereby seeks to receive compensation from these companies for its services. In addition, EnerCom, or its principals or employees, may have an economic interest in any of these companies. As a result, readers of EnerCom’s Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this note. EnerCom, or its principals or employees, may have an economic interest in any of the companies covered in this report or on Oil & Gas 360®. As a result, readers of EnerCom’s reports or Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.