Cheniere Energy, Inc. (NYSEAMERICAN: LNG) is having an overwhelmingly strong day in the market today after announcing that it has entered into two liquefied natural gas sale and purchase agreements. Of course, this news led to excitement among investors, sending the stock screaming toward the top. Today, we’ll talk about the agreements, what we’re seeing from the stock, and what we’ll be watching for with regard to LNG ahead.
LNG Enters Sale And Purchase Agreements
As mentioned above, Cheniere Energy is having an incredibly strong day in the market today after announcing that it has entered into two liquefied natural gas sale and purchase agreements with China National Petroleum Corporation. The SPAs were signed between a subsidiary of LNG, known as Corpus Christi Liquefaction, LLC and CNPC subsidiary PetroChina International Company Limited.
Under the terms of the agreement, the companies will purchase approximately 1.2 million tonnes per annum of liquefied natural gas, with a portion of the supply beginning in 2018 and the balance beginning in 2023. The agreements will remain active through the year 2043. The purchase price will be indexed to the Henry Hub price plus a fixed component. In a statement, Jack Fusco, President and CEO at LNG, had the following to offer:
We are pleased to announce these LNG contracts with China National Petroleum Corporation, an important global energy player in one of the largest and fastest growing LNG markets worldwide… These long-term SPAs build upon the Memorandum of Understanding we signed in November, and we look forward to a successful long-term partnership with CNPC. We expect these agreements to support the development of Corpus Christi Train 3, and we are now focused on completing the remaining necessary steps to reach a final investment decision later this year.
What We’re Seeing From The Stock
As investors, one of the first things that we learn is that the news moves the market, and this news was overwhelmingly positive. After all, it leads to sale and purchase transactions that will extend for decades to come. As a result, it’s no surprise to see that Cheniere Energy is making a run for the top. Of course, our partners at Trade Ideas were the first to alert us to the gains. Currently (10:43), LNG is trading at $55.80 per share after a gain of $2.65 per share or 4.99% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on LNG. In particular, we’re interested in following the progress on the SPAs that were announced today as well as the company’s work on Corpus Christi Train 3. Nonetheless, we’ll continue to follow the story and bring the news to you as it breaks!
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