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Analyst starts Cheniere with 'Buy' rating

NEW YORK (AP) -- Shares of Cheniere Energy rose Tuesday as a Goldman Sachs analyst started coverage of the company with a "Buy" rating, saying it offers the best way to invest in the growth of U.S. liquid natural gas exports via two new proposed projects.

The projects include the Sabine Pass expansion and the proposed Corpus Christi, Texas facility.

"We believe Cheniere (particularly its brownfield Sabine Pass terminal) has a construction cost advantage relative to other new-build liquid natural gas proposals given its ability to leverage its re-gas and existing midstream infrastructure," Steve Sherowski wrote in a client note. The analyst believes the Sabine Pass project is about two years ahead of its closest competition.

The Sabine pass terminal is located on land along the Sabine Pass River on the border between Texas and Louisiana.

"With 90 percent of its capacity contracted, we believe this project offers investors high cash flow visibility with potential upside from marketing volumes," he said.

Sherowski said that there's also possible upside to investors from incentive distribution rights, or gradually increasing dividend payments.

The analyst gave Cheniere Energy Inc. a 12-month price target of $53.

The company's stock climbed $2.09, or 4.8 percent, to $45.39 in midday trading.