Cheniere Energy says it has had extensive negotiations with China about increasing U.S. LNG exports, as a new trade deal paves the way for a second wave of LNG investment in the world’s fastest growing gas supplier.
As Reuters reports, the Trump Administration on Thursday reached an agreement with China to increase trade access for some U.S. companies to China. The agreement is expected to include LNG exports.
“We have had extensive negotiations with the Chinese over the last month,” Cheniere spokesman Eben Burnham-Snyder tells Reuters. “We’re heartened by this trade deal for its potential to increase Chinese access to American LNG.”
Cheniere is currently the only company able to export large cargoes of LNG from the continental United States, giving it a leg up now to ink long-term contracts with China, the world’s largest growth market for gas.
Cheniere is not solely dependent on China for its growth. The company also has shipped LNG to 20 other countries around the globe, and is in talks to ship to more, Burnham-Snyder says.
Shares of Cheniere jumped as much as 5% to $49.50 today to their highest since February, and the stock has more than doubled since Cheniere’s Sabine Pass terminal in Louisiana first opened in February 2016. The stock traded at $48.75 as of 2:33 p.m.
The Trump deal should benefit several companies building LNG export terminals in the United States, which is forecast to become the third largest exporter of liquefied natural gas by the end of next year, due in part to heavy demand out of Asia.
“We are happy for all support in moving forward with U.S. LNG exports…We view this announcement as a step forward in improving the balance of trade,” says Joi Lecznar, a spokeswoman for Tellurian, which is developing the $13-$16 billion Driftwood LNG export facility in Louisiana expected to enter service in 2022.
