Comes a (Huge) New Investor for Cheniere

Comes a (Huge) New Investor for Cheniere

Houston-based Cheniere has grabbed its share of headlines recently and the latest is a doozy. First came the announcement earlier this month that Abu Dhabi Investment Authority (ADIA) had scooped up a 5.1% stake in the company valued at $615 million. The deal made ADIA Cheniere’s third-largest investor right behind Icahn Associates Holding with 8.25%. But not so fast, fellas. There’s a new kid in town and this one’s a chunk. After musing last year that it would “entertain serious offers” for a 41.2% stake in the LNG heavyweight, private equity firm Blackstone Energy Partners has officially handed over the car keys to Brookfield Asset Management. The position is valued at $7.8 billion. Blackstone invested a mere $1.5 billion in Cheniere eight years ago. Somewhere, Blackstone’s institutional investors must be weeping with joy while Brookfield bets big on a return to pre-COVID demand for LNG exports.

 

Cheniere Energy

Cheniere Energy, Inc. is a liquefied natural gas company headquartered in Houston, Texas. In February 2016 it became the first US company to export liquefied natural gas. As of 2018 it is a Fortune 500 company.

www.cheniere.com

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Learn more about Reese Energy Consulting and our natural gas and LNG expertise at www.ReeseEnergyConsulting.com.

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The Waiting Is the Hardest Part

The Waiting Is the Hardest Part

The permitting process is now complete for the ginormous, state-led, Alaska LNG Mega Project and North Slope Pipeline—and in record time at only three years. Upon completion, the 807-mile natural gas pipeline will flow supplies from Prudhoe Bay—which produces on average 3.5 BCFD of gas—to the proposed liquefaction and export terminal chillin’ southwest of Anchorage. The facility will be capable of exporting 20 MTPA. The state sponsor of the project—Alaska Gas Development Corp. (AGDC)—submitted its first estimate of $44.2 billion. But that quickly set hair on fire, and initial investors ExxonMobil, BP, and ConocoPhillips, citing depressed gas prices, folded in 2017. Then Alaska’s governor deemed the project too complex and risky for the state to develop on its own. AGDC subsequently announced it doesn’t plan to continue to own, or later operate, what is considered to be one of the largest, most costly LNG complexes in the world. The state sponsor returned to the table in June with a slashed budget of $38.7 billion, a new economics deck, and a search for partners to transition the project by January.

Alaska Gas Development Corporation

The Alaska Gasline Development Corporation (AGDC) is an independent, public corporation of the state of Alaska. AGDC’s roots date back to 2009, when declining Cook Inlet gas supplies raised the possibility of local energy brown outs and higher energy costs. In 2010, the Alaska Legislature passed House Bill 369, creating AGDC.

agdc.us

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Learn more about Reese Energy Consulting at www.ReeseEnergyConsulting.com.

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Gimme an L…Gimme an N…Gimme a G…

Gimme an L…Gimme an N…Gimme a G…

Despite the deep plunge in demand for U.S. LNG exports, Cheniere Energy has attracted a deep-pocketed shareholder with all eyes fixed on a looming recovery. Abu Dhabi Investment Authority this week snatched up a 5.1% stake in Cheniere valued at $615 million, making it the company’s third-largest investor right behind Icahn Associates Holding with 8.25%, or nearly 21 million shares. This comes as a grand and welcomed demonstration of optimism for the nation’s LNG export industry after falling off a cliff in the Spring and Summer with decreased production more than half its all-time high of 9.8 BCFD in late March. But according to the EIA, U.S. LNG exports are poised for a big bounce by late November and return to pre-COVID levels averaging more than 9 BCFD from December through at least next February. Cheniere is the nation’s largest LNG producer and second largest in the world, with terminals in Cameron Parish, La., and Corpus Christi, Texas, that output more than 22.5 million tons of LNG each year.

 

Cheniere Energy

Cheniere Energy, Inc. is a liquefied natural gas company headquartered in Houston, Texas. In February 2016 it became the first US company to export liquefied natural gas. As of 2018 it is a Fortune 500 company.

www.cheniere.com

What do you think?

Learn more about Reese Energy Consulting and our LNG services at www.ReeseEnergyConsulting.com.

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An Open Season, Potential Interest Buy in Cheniere, and the Ballad of the SPR Motel

An Open Season, Potential Interest Buy in Cheniere, and the Ballad of the SPR Motel

RMR features the latest high-point news to keep you to up to date with midstream activities happening in the basins and shale plays that matter to you most.

Red Butte Pipeline Launches Open Season

Dallas-based Silver Creek Midstream has announced an open season for shipper commitments to make improvements on an eight-mile section of the company’s 495-mile Red Butte crude oil pipeline in Wyo. Deadline for bids is September 7. Red Butte is the largest transmission line to extend from the Big Horn and Wind River basins to Casper, Wyo. Upon completion of upgrades and refurbishments to the proposed section, the pipeline will offer 5,000 BPD of capacity. The Red Butte system includes two delivery points, multiple truck-loading stations, and more than 800,000 Bbls of storage.

PE Firms in Talks to Buy/Sell Large Interest in Cheniere

Private equity firm Blackstone began shopping its 41% interest in the nation’s largest LNG operator two months ago after investing $1.5 billion in Cheniere in 2012. Negotiations now appear to be on the table between Blackstone and alternative asset manager Brookfield for a stake in Cheniere valued at $7.8 billion. The company’s market value stands at about $18.9 billion. Amid demand destruction that has seen LNG exports nose-dive from a record-breaking 8.1 BCFD in January to 3.1 BCFD in July, and EIA projections of a serious recovery by the first of 2021, we’d love to see the calculus from each firm on this deal.

Producer Storage at the SPR Begins to Lighten

The nation’s Strategic Petroleum Reserve was never meant to be an extended-stay motel for producers’ crude oil supplies. Between the April oil glut and a near fever-pitch panic for storage wherever it could be found, the SPR offered up capacity in its underground salt caverns as a temporary sanctuary for U.S. oil whose price had free fallen into an abyss. While the Trump Administration advocated to purchase 77 MMBbls, Congress would have none of it. Instead, nine oil companies took advantage of the opportunity to store 23 MMBbls of oil in exchange for cheap rent and an eviction date of March 31, 2021. With the price of oil now rebounding, Exxon and the U.S. leg of Total this month have reclaimed 2.2 MMBbls of their crude. Take a load off, Fannie.

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