Cheniere Energy, Kinder Morgan Sign Long-Term Contracts
Cheniere Energy, Inc. (LNG) announced that it has entered into long-term agreements with three units of North America’s largest midstream energy firm, Kinder Morgan, Inc. (KMI), for its Corpus Christi Liquefaction project. The firms have signed 15-year transportation and multi-year storage contracts.
Per the terms of the contracts, Kinder Morgan would provide transportation service for 550,000 dekatherms of natural gas per day (Dth/d), which can be increased to 800,000 Dth/d following the expansion of its Texas pipeline system. The firm would also provide storage services for 3 billion cubic feet of natural gas to serve the Corpus Christi liquefied natural gas (LNG) export facility.
Kinder Morgan stated that the construction work to expand its South Texas and TGP Pipelines to provide additional services will be synchronized with the startup of the LNG facility. The company plans to invest around $187 million in this project.
Corpus Christi Liquefaction, LLC, an affiliate of Cheniere Energy, is developing this facility. The LNG export terminal will have provision for 3 trains and LNG production capacity of around 13.5 million tons per annum. The project’s final investment decision is pending regulatory approvals and requires sufficient contract commitments and finances. Construction on the Corpus Christi liquefaction project is likely to begin in early 2015.
Houston, TX based Cheniere Energy is primarily engaged in LNG-related businesses. The company carries operations through two business segments, namely, LNG Terminal Business and LNG and Natural Gas Marketing Business.
Kinder Morgan is one of the largest midstream energy companies in North America, operating approximately 80,000 miles of pipelines transmitting natural gas, refined petroleum products, crude oil, carbon dioxide and additional products.
Currently, Cheniere Energy and Kinder Morgan both hold a Zacks Rank #2 (Buy).
Other stocks worth considering from the broader energy space include Seadrill Partners LLC (SDLP) and Murphy USA Inc. (MUSA). Both these stocks sport a Zacks Rank #1 (Strong Buy).
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