Quote: In September, 2006, Kinder Morgan requested government approval for its proposed Louisiana Pipeline, expected to provide 3.2 billion cubic feet per day of natural gas take-away capacity from the new Cheniere Sabine Pass LNG terminal in Cameron Parish, La. At an estimated cost of $514 million, the pipeline would provide access to new supplies of imported LNG. The pipeline's capacity is fully subscribed with long-term commitments from Chevron (CVX) and Total (TOT). Construction is under way and is expected to be completed in 2009.
I am very disappointed in the ceo of this company. His lack of concern for the shareholders. Bad decisions were made with the trading book and this should not have happened. He needs to prove he can run a company and get some good contracts with some companies that ship lng and make things happen. I do think long term if it is run right it can be very successful.It's really way to cheap but if results come thru and he shows he can run a company and pull it thru we will have respect for him. timing is everything.
CQP has contracts with Chevron and Total for 50% of the total capacity after finishing all phases. The problem is that the cash flow that is generated from those 2 Terminal Use Agreements is not enough to pay the distribution to all of the units. Fortunately the units that LNG holds ae subordinated. If LNG (the company) can buy LNG (the commodity) and sell it for even a razor thin margin, the terminal will be a success. Sounds simple, but I think Souki has been working on that problem for several years with no results.