Outside Bar (Bearish)
|Bid||28.00 x 1000|
|Ask||28.41 x 1000|
|Day's Range||26.00 - 28.90|
|52 Week Range||17.75 - 49.30|
|Beta (5Y Monthly)||1.12|
|PE Ratio (TTM)||12.58|
|Forward Dividend & Yield||2.52 (9.54%)|
|Ex-Dividend Date||Feb 05, 2020|
|1y Target Est||N/A|
(Bloomberg) -- Liquefied natural gas traders are following the latest trend in the oil market by storing huge amounts of the commodity on tankers, hoping prices will rise before the ship docks.But while crude can sit for months or even years in a tank, super-chilled LNG tends to evaporate even in the specialized vessels that handle it. That limits the amount of time “floating storage” is feasible.“Keeping gas frozen is extremely expensive because of the energy cost to maintain the ultra low minus-265-degree Fahrenheit temperature,” said Francisco Blanch, head of global commodities and derivative research for Bank of America Corp. in New York.The number of vessels used for floating storage was at 17 late last month, but has now eased to 13 after some unloaded their cargoes in India, according to data intelligence company Kpler. Three vessels have been idle for more than 10 days, Kyriakos Mezopoulos, director for LNG at Affinity, said in a note.More ships acting like storage tanks might also be a sign the LNG industry is poised to cut production. They’re reacting to a crash in prices as demand slowed, the result of two warm winters in a row and the coronavirus, which has shut huge parts of the global economy.U.S. LNG producer Cheniere Energy Inc. is already sourcing cargoes in Europe, with some traders and analysts speculating that this could be ahead of temporary production cuts.Spot LNG in Asia, the biggest consuming region, slumped to a record this week, and prices in Europe are also testing all-time lows. And unlike in oil, where markets indicate a rebound in prices in the months ahead, a surge in forward rates for LNG is too far off to matter.“We clearly see floating storage as a safety valve in the next couple of weeks and even in the next couple of months,” Jefferson Clarke, managing director for LNG at shipbroker Poten & Partners Inc, said at the webinar.In the crude oil market, plunging prices triggered a huge contango, where traders anticipate gains in future months and have an incentive to put the commodity into storage for months or years. They’ve hired tankers because storage sites on land are almost full.Oil Tanker Rates In Prolonged Rally as Excess Oil Seeks StorageThe dynamics are different in the gas industry, where gas storage sites on land that should be near empty still have fuel from last year. Also, the “boil-off” rate is a factor for LNG. Between 0.07% to 0.15% on average evaporates from LNG tankers per day for the majority of the global fleet. That means over a 75 day voyage, about 5% to 11% of the original cargo could be lost.Last fall, some traders loaded cargoes at low prices in August and discharged in early November when rates were rising. A typical journey from Qatar to the U.K. via Suez Canal, for example, takes about two weeks.While new vessels have better technology that limits the evaporation rate -- Flex LNG Ltd. has three ships for delivery later this year with a boil-off of about 0.035% - the difficulty containing the gas over long periods means using tankers as storage has a physical limit.“Floating storage is less about stockpiling, but more about slow-steaming until hopefully the rates pick up,” Iain Ross, chief executive officer of shipowner Golar LNG Ltd., said at the webinar organized by Capital Link Inc. and Citigroup Inc.While benchmark Asian LNG has lost about half its value this year, the storage trade is a bright spot for vessel owners. They can charge more than 40% more per day for a typical tanker in the Atlantic than at the same time a year ago, according to data from shipbroker Fearnleys A/S.Unusual TrendThe latest trend is unusual for this time of year, said Oystein Kalleklev, chief executive officer of Flex LNG. The company now has six vessels that it rents out. Unlike oil, LNG demand is largely seasonal, with a peak in winter when heating is in demand and another smaller lift in the summer for cooling.More floating storage may appear in September and October, when tanks on land are full and winter chills have yet to arrive, while price bottom out right before seasonal advances. Demand for vessels later this year is already rising, said Mark Kremin, CEO of shipowner Teekay Gas Group Ltd.Vessels with a very low boil-off make them “perfect” for floating storage play in the second half of the year, and Flex has fixed one of its upcoming vessels with trading house Gunvor Group Ltd., Kalleklev said on Friday.In part, floating storage in LNG now is a result of quarantines, Kalleklev and his peer from Hoegh LNG Holdings Ltd., Sveinung Stohle, said in interviews. Other reasons are cargo deferrals and diversions, as the virus hit demand and delayed unloading, the shipping executives said at the webinar.Loadings at plants have also slowed because global inventories are so full, Kalleklev said. Also, as the covid-19 situation eased in China and South Korea, ships are sailing from Europe to Asia, naturally extending voyages and shrinking availability of vessels in the Atlantic, he said.Indian buyers calling force majuere on cargoes last week has meant volumes needed to find other homes in an oversupplied market, so this involuntary floating storage came amid what looks like distressed cargoes, said Trevor Sikorski, an analyst at Energy Aspects Ltd.“We will see increased inefficiencies with regards to discharge and possible ships having to wait 14 days from loading to discharge,” Kalleklev said in an emailed response to questions.(Updates with boil-off rate for new Flex LNG vessels, Gunvor charter in the 17th and analyst from comment in penultimate graph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Cheniere Energy Inc has completed the Midship natural gas pipeline in Oklahoma at a cost of around $1 billion and is seeking federal regulators' permission to put it into service, according to a filing made available on Wednesday. Cheniere has asked the U.S. Federal Energy Regulatory Commission (FERC) for permission to put the project into service "at the earliest time possible, but no later than April 17, 2020, in order to meet the needs of its shippers," the filing says. Cheniere, the nation's biggest liquefied natural gas (LNG) exporter and biggest consumer of gas, started work on the project around February 2019.
(Bloomberg) -- After two warmer-than-usual winters gutted demand for energy, natural gas is headed for an even more difficult summer because of the coronavirus.The price of the fuel used for everything from power generation to home heating is plumbing record lows in Amsterdam, one of the world’s deepest and most liquid market for the commodity. Higher temperatures in the northern hemisphere meant less need for energy during the coldest months, leaving the industry ill prepared for virus-related health scares now shutting big parts of the global economy.The result puts the gas industry on course for the biggest upheaval in its modern history, gutting profits of shippers from Gazprom PJSC in Russia to energy majors including Royal Dutch Shell Plc and paring back the cost of imports for big buyers led by China and Japan.“We are still going through the peak of this bearish cycle,” said Samantha Dart, head of natural gas research at Goldman Sachs Group Inc. in New York. “The virus outbreak has exacerbated the oversupply situation in the global gas market.”In Amsterdam, gas prices have plunged 58% since the heating season started in October and the worst quarter on record. U.S. futures had their biggest first-quarter drop since 2012. The outlook is worse still.Like the tulips now blooming across the Netherlands, gas is at a seasonal turning point, with both the plants and the industry are weeks ahead of normal because of warm weather. Most gas wells flow constantly, but demand for the fuel peaks in the winter and tapers off in the “shoulder season” before summer, when the industry schedules maintenance and diverts flows into storage.European Gas StorageThis winter, weak demand pushed more fuel into storage, leaving sites unusually full in Europe, the U.S. and parts of Asia. Those inventories from the start of April will only accumulate. That sets up the industry for a crunch in August and September when tanks will be brimming at or even beyond their capacity.“There’s a chance we will see a collapse in prices in the U.S.,” Francisco Blanch, head of global commodities and derivatives research at Bank of America, said in a telephone interview. “We are going to be weak on the demand destruction related to the virus, but the real issue is that we had a very warm winter and we are coming out with extreme high inventories.”The gas industry is starting to take extraordinary measures to balance supply and demand. Those include:Storage companies in France and Italy have begun shifting tanks to injecting flows of gas instead of withdrawing them. That’s happened four to six weeks earlier than usual. Across Europe, inventories have finished winter more than 50% full, a level more typical for the middle of June. U.S. sites are 17% more full than average. China National Petroleum Corp. started injecting gas into some storage sites in March.Russia has scaled back some flows, and Norway delayed maintenance work on fields and terminals that’s typically done later in the summer season. What’s clear is there’s more supply than needed arriving in Europe by pipeline.Measures in India and China to combat the virus dashed gas demand, forcing LNG importers to cancel or delay shipments. European buyers in Italy and Spain are considering following suit. Shell, the world’s biggest LNG trader, has had to reshuffle its cargoes when the outbreak hit China.U.S. LNG producers led by Cheniere Energy Inc. have signaled that low margins on delivering cargoes to the Europe and Asia may force them to slow output at least temporarily. That’s threatening to curtail exports of gas from the U.S., which has had a key role in globalizing gas prices since it made its first LNG shipments in 2016. Global LNG demand may fall by 4.7% in 2020, according to Jason Feer, head of business intelligence at Poten & Partners in Houston.Seventeen LNG vessels around the world were tagged as floating storage as of March 27, more than triple the number of the previous week, according to Rebecca Chia, an analyst at the tanker-tracking consultant Kpler.The entire industry is braced for a big slump in demand, leading to talk about which producers might be forced to cut back on flows. Analysts have yet to get a grasp of how long the interruptions will last or how wide the impact will be. BloombergNEF estimates that power generators will draw a third less gas than they usually do in Europe. Gazprom is optimistic about the third and fourth quarters despite declining markets in the first quarter, CEO Alexey Miller told Russian President Vladimir Putin on Friday.“All fundamentals point to a bearish market” in Europe, said Ahmed Hammoudan, senior gas trader at Eneco, a Dutch energy company. “We have unprecedented healthy storage levels, and pipeline suppliers have no reasons to reduce flows. I can’t really see any bullish sign.”The glut in the market is exacerbated by a crash in crude oil, which has affected some gas supply contracts that are linked to oil. The industry’s response to lower demand is reworking the delicate economics of the global gas and power industries, unsettling typical seasonal patterns.In ordinary times, gas prices peak in winter and ease during the spring and summer when storage absorbs much of the flow. This year, the pace of injections might support prices briefly in April and May before giving way to more weakness later in the summer, according to Julien Hoarau, gas market analyst at Engie EnergyScan. Storage sites are likely to be full well before October when the next heating season begins, making it likely that producers will have to choke back flows from their wells.“We expect storage stocks in Asia to be above normal levels heading into the summer,” said Jeff Moore, an analyst at S&P Global Platts. “This could put significant downward pressure on spot prices. It has the potential to cause deferments or cancellations of cargoes.”The unfolding coronavirus panic has potential to trigger “very significant demand drops almost all over Europe,” said Stefan Wieler, head of energy markets analysis at Axpo Holding AG. “With wide scale industrial shutdowns only starting right now, these demand destructions are likely to get even more significant in the coming days.”While the impact of the virus is roiling forecasts at the moment, longer term it’s the weather that’s likely to guide the outlook for gas. The decade beginning in 2010 was the hottest ever worldwide, and it’s the fourth in a row to set a new high. The five warmest years occurred since 2015.“The impact of the weather was already significant,” said Deepa Venkateswaran, an analyst at Sanford C Bernstein and Co. in London.“The coronavirus will take that to a much higher level.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- One of the world’s biggest liquefied natural gas exporters is signaling it may throttle back production.Cheniere Energy Inc. has tendered to buy six shipments for delivery to Europe later this year, a rare step for a company that’s fundamentally a seller of the fuel. The company could be testing the size of the current glut as it weighs output cuts, or even seeking cargoes for its customers that could be cheaper than producing and shipping its own from the U.S. Gulf Coast, according to a Bloomberg survey of traders.Four of the six cargoes were awarded at a discount of about 20 to 30 cents to the European benchmark Dutch Title Transfer Facility, according to traders with knowledge of the information. The benchmark contract for May traded at about $2.24 per million British thermal units on Tuesday on ICE.Traders are closely watching any indication that U.S. exporters will curb production as the coronavirus restrains demand and exacerbates an oversupply. Houston-based Cheniere declined to comment on the tender.The company “may be trying to figure out how long the market really is and to make a judgment on whether they should shut down some production,” said Jason Feer, global head of business intelligence at Poten & Partners Inc. in Houston.Shipping LNG from the U.S. to Europe or Asia this summer will be unprofitable, BloombergNEF said in a Feb. 27 note. Spot prices have since declined further, while vessel rates have jumped, in a further indication that it may be cheaper to buy cargoes already available in the market than produce and ship it.Gas flows to Cheniere’s export terminals dropped 13% this month from February’s average as output was partly reduced because of fog-related shipping delays and plant maintenance. The facilities in Sabine Pass, Louisiana, and Corpus Christi, Texas, are taking in 19% more gas than they were last March.With the coronavirus pandemic expected to exacerbate the seasonal lull for gas around the world, “it’s reasonable” to expect customers won’t lift some cargoes while still paying tolling fees under their contracts, Anatol Feygin, chief commercial officer for Cheniere, said last week during the Scotia Howard Weil investor webcast.The company also closed a separate deal last week offering to sell a prompt cargo from its Sabine Pass facility, which traders said was likely one of its first-ever tenders.Cheniere boosted capacity at each of its seven liquefaction units to about 5 million tons a year from their planned nameplate of 4.5 million thanks to operational efficiencies. The company has declined to comment on operations and whether any cargoes were canceled beyond two for April reported last month.Aside from a buyer with a 20-year contract opting to not lift a cargo, Cheniere had already cut the amount of cargoes that its marketing arm makes available, Feer said.“They had been producing additional cargoes for Cheniere Marketing, but they stopped that a while back,” he said.(Updates with tender results in third paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Asian spot liquefied natural gas (LNG) prices crashed below $3 per million British thermal units (mmbtu) reversing three weeks of gains, after Indian buyers cancelled or diverted cargoes as a lockdown caused gas demand to slump. The average LNG price for May delivery into northeast Asia was estimated at about $2.80 per million British thermal units (mmBtu), down 70 cents, or 20% from the previous week, traders said. Prices for cargoes delivered in April were estimated around $3.00/mmBtu, also down 70 cents from a week ago.
Cheniere Energy (LNG) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.
We hate to say this but, we told you so. On February 27th we published an article with the title Recession is Imminent: We Need A Travel Ban NOW and predicted a US recession when the S&P 500 Index was trading at the 3150 level. We also told you to short the market and buy […]
Cheniere Energy (LNG) incurs higher year-over-year costs and expenses as operating and maintenance expenses significantly escalate to $330 million in Q4.
Cheniere Energy (LNG) delivered earnings and revenue surprises of 31.48% and 13.18%, respectively, for the quarter ended December 2019. Do the numbers hold clues to what lies ahead for the stock?
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China has restarted talks with U.S. liquefied natural gas marketers to buy more LNG, several industry executives told Reuters, but they are worried that any purchases may come too late to keep natural gas prices from falling further due to a glut of global supply. China pledged this month to buy an additional $18.5 billion in U.S. energy products this year, but the U.S.-China trade agreement left tariffs in place, including a 25% levy on LNG imports that puts U.S. LNG at a disadvantage, producers said. "The U.S. doesn't have a margin that would allow any country to charge 25%" above global prices, said Michael Smith, chief executive of Freeport LNG, referring to the tariff.