Natural gas prices were range bound for the better part of the last decade, oscillating between $2 and $4 per million British thermal units (MMBtu) with the occasional spike outside that tight range. With a constant increase in supply and lackluster demand, beyond some unusually cold winters, many energy production companies started to shift production away from natural gas to focus on crude oil while others looked at more lucrative markets in the East to ship the excess natural gas. To ship natural gas to other international market, the gas has to be liquified first to create LNG and then shipped via special ocean tankers.
When you think about the big jump in natural gas prices in Europe and the upcoming disruption to supplies from Russia, Cheniere Energy (NYSE:LNG) comes to mind. The company spent several years investing in building LNG terminals and in February 2016 started to export LNG. I had looked at Cheniere several times over the years but the company's net losses, large capital investments and massive debt load in an environment that wasn't favorable for natural gas prices did not give me much confidence. All of that changed with the current geopolitical environment.
