cheniere_logo.jpgCheniere Energy, Inc. (AMEX: LNG) , a developer and operator of liquefied natural gas receiving terminals and natural gas pipelines, has been active in the news lately, however it didn't bring a much waited trend reversal. The decline continued with the stock losing another 6.2% over July 1, 2008.

The company announced on June 30, 2008, that their subsidiary, Cheniere Marketing, Inc., had entered into agreement with J.P. Morgan Ventures Energy Corporation for the sale of liquefied natural gas. Following the agreement, J.P. Morgan will also acquire part of Cheniere Marketing's storage capacity and regasification services.

Chairman and CEO of Cheniere Energy, Charif Souki , commented on the agreement: "We believe that JPMorgan's domestic natural gas business and their power generation asset base will make an excellent complement to the send-out capabilities of the Sabine Pass terminal. We look forward to finding ways to incorporate the financial derivatives expertise of JPMorgan into our LNG origination effort for the benefit of our suppliers."

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Despite huge historical losses from operations, Cheniere has plenty of cash on hand and is constructing the Sabine Pass LNG receiving terminal. The terminal should be completed and fully operational by the third quarter of 2009.

Although this sounds pretty promising, the company is still burning off its remaining cash pretty quickly. If Cheniere would have to raise additional capital from equity financing, the dropping share price would surely take its toll, to say nothing of existing shareholder dilution. Meanwhile, everything else looks pretty much under control except for the company's stock which still shows no signs of a reversal of the downtrend .

References:

www.cheniere.com
http://sec.gov/Archives/edgar/data/3570/000115752308005208/a5719936ex991.htm