Canadian LNG Exports - The Ground Floor
"LNG bull thesis tautalogically flawed:
- The notion that exporting liquified natural gas is bullish for ECA is logically flawed - without low prices, their would be no opportunity for this, and if ECA thinks low prices will last the many years it takes to build an LNG export facility, then there would be no economic case to buy ECA today, at least at these prices. So ECA is basically admitting the bear case for NG prices by touting this option. Kitimat is not forcecast to be operational until 2015 according to their website."
I do NOT agree. And a couple of NL's that I subscribe to who gave ECA a reco don't either. Again, where else are you going to get exposure to a Canadian LNG exporter at this price that owns one third of the proposed facility AND owns some of the feed gas assets that will pass through it on the way to eager and cashed up Asian energy buyers?? At sub $18 a share (that could go even lower) I BELIEVE that's the opportunity here. Throw in ECA's asset base both in the US and Canada and what a BARGAIN indeed!!!! I'm confident of losing not one penny on the ECA shares that I've been buying since they hit $19 over the term I plan on holding these shares. And that would be the long term.
Anyway, while they are very different companies that will wind up taking very different routes to ultimately the same goal - LNG exports, I like to look at both ECA and Cheneire Energy (LNG- that's their catchy stock symbol as well) that owns Sabine Pass LNG export terminal on Louisiana's Gulf coast. As far as I know Cheniere owns no natural gas assets themselves AND they own the whole facility themselves. I still like to compare what's happened to LNG (Cheniere) and do a little back & forth about the same (ultimate) possibilities occuring to the partners that own & operate the Canadian facility. While LNG had what most would call a ROCKY RIDE to where they now find themselves, it wasn't that long ago that their share price was around $3. Remember that?? I do because I used to watch what was going on with them trying to get this thing permitted and built. Slowly but surely and maybe almost to the point of bankruptcy, they prevailed. And the upward migration of their shares started. I ALWAYS thought about how your $$ would have grown IF you could handle all the noise and just don't do anything except buy near a low point, tune EVERYTHING OUT about what the nay-sayers say and just hold them - FOREVER. If you had used that strategy with a few thousand shares of sub $3 LNG stock some years back, besides "pharting through silk" as I used to hear, one would be VERY well off today. Though I wouldn't be selling here either when in reality the exports haven't really started yet.
IMO ECA is a MUCH better investment than LNG was at the same stage of the game. ECA has/owns the gas AND a one third chunk of Kitimat. So again - IF you aren't buying your position in ECA now at these ON SALE prices, how else are you going to invest in what's basically THE GROUND FLOOR of Canadian LNG exports??? Like I said before - the real risk with ECA shares is in not having any long before any of the good stuff regarding LNG exports from Canada's west coast starts. And I'm NOT missing any of it....