As I understand CQP, its very much like a pipeline partnership stock. I would be very pleased with long-term dividends over 10%, rising over time with full utilization of capacity and increases in NG prices that will also cause the share price to improve. What its NOT is a pure play on NG as you would get with a driller or producer. Comments?
CQP will be lucky if they can make the distribution as is, let alone raise them. The price of LNG is up tremendously and the US can't compete with Europe and Japan (they are paying more). LNG (the parent company) holds 50% of the capacity at CQP and will need to most likely, sell LNG (the product) at a minimal or even a loss in order for CQP to make money on the 50% of undesignated capacity. LNG and CQP screwed up by not signing more terminal use rights like they did with Total and Chevron. I see CQP floundering into the low teens until the picture becomes more clear.
You're just spouting the same nonsense as the LNG shorters. Are you one of them?
CQP distribution is safe until end of 2009.
Shorters like to discuss the pop in spot price that occurred over the winter when Japan had to temporarily shut down a nuclear plant due to seismic activity. They fail to mention that agreements for LNG supply can be spot or term contracts. I've heard predictions of $14 spot price for NG (Henry Hub) in 2008. What is the price that a term contract in Nigeria could lock in for a supply of LNG at a liquefier? You don't have any f-ing clue, because you're just spouting the BS that somebody else planted in your ear.
Sabine Pass is now open for business. Cheniere Marketing is on the hook for all of the capacity there until 2009 when other contracts kick in for 50% of the capacity. The construction of this facility has been paid already. Overhead is minimal. I don't believe any company is stupid enough to buy LNG cargoes at spot prices of $X and then sell them into the Henry Hub for ($X - 1).
That's just silly, and you don't know even the first thing of what you're talking about. You don't show much intelligence by parroting the worst case scenario of those with an economic interest in driving down the price of LNG the company. Could be you're one of the shorters.
Funny how LNG shares were down big last week, while CQP was pretty darned stable.