Farmer @ Johnsongrass, TX said:
I got a buddy that thinks XOM should buy CQP....and may. Any thoughts on that speculation?
Honestly I am not sure. So CQP is the partnership while "LNG" is kind of a standalone and focuses on the Corpus facility alone. CQP owns and manages the pipelines as well as the Sabine Pass facility. That is the one I have dealt with since about 2019 with work and have since moved my focus to Cameron but I digress.
Sabine has been up and running with 5 trains and train 6 is now up and running. They have the land to build 7,8, and 9 but they aren't there yet for planning purposes. My understanding is they (LNG companies in general) don't start building their trains until the contracts are in place and these are 10-15 year contracts where 85% of the LNG goes to. The remaining is spot gas where the boats float in the waters and then there is a dire need for LNG and they sell at a premium. This is partly why when shell pulled their deal from TELL, that was a huge deal. But based on the fact construction has already started, i believe they will get that figured out.
The growth for Cheniere is off the charts IMO and CQP pays a dividend. I kick myself constantly for not investing more into this based on my dealings with them. By the time I got into the market was COVID and I caught the AMC meme craze and then learned from this thread what options were. Watched account go boom to bust but learned a lot in the process.
I don't know if any of that helps or not but tried to offer some value. based on their growth, I can't see them selling as i don't see why they would. XOM surely has the cash but they are the number 1 player in the LNG market with only more upside to go. Especially with 2 plants running and the train growth on the table at Sabine.
