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To: Ed Ajootian who wrote (69)6/2/2003 10:37:28 PM
From: Ed Ajootian
   of 112
Cheniere Hires CMS' LNG Guru To Implement Gulf-Based Strategy
(Copyright © 2003 Energy Intelligence Group, Inc.)
Natural Gas Week Monday, May 12, 2003

Determine d to capitalize on what it sees as a 10 Bcf/d liquefied natural gas (LNG) import market in the near future, Cheniere Energy has hired on one of the industry's big guns to head up its LNG division.

The Houston-based company said late last week that Keith Meyer, who formerly headed up LNG operations for CMS Energy, the owner and operator of the Lake Charles, Louisiana, LNG import terminal, will join Cheniere as president of its Cheniere LNG subsidiary. The personnel change will take place as soon as the sale of the CMS Panhandle pipeline unit to Southern Union is complete, Cheniere said.

"Cheniere is an attractive company to me because they are very focused in the development of LNG terminals and have secured some of the highest quality sites I have seen. A properly executed plan, and one which I intend to see to fruition, will see Cheniere becoming North America's premier LNG gateway," Meyer told Natural Gas Week.

Cheniere, once a typical and little-known small producer in the Gulf region, has muscled into the LNG business to compete with the better-financed majors and integrated companies (NGW Jun.18, '01,p1).

Cheniere and other independents face increasingly high production costs on the shallow water shelf Gulf of Mexico and fewer prospects. At a recent New York conference, Charif Souki, Chenier's chairman, cited a $4/Mcf gas price as necessary to justify further exploration there.

Souki sees a need for up to six new receiving terminals in the US. After searching for potential import terminal sites, Cheniere has set its sights on four potential locations all catering to the Gulf Coast market.

"It's the home of numerous industrial and gas consuming facilities, it's close to any number of major pipeline systems…[and] the atmosphere is just more friendly to industry. You will never see a receiving terminal in New York Harbor," Souki said.

Souki does not view as particularly promising for a company of Cheniere's size the Florida gas market, which companies such as Tractebel and AES are considering as targets for a Bahamas-based LNG facility. "Unless you have a contract with Florida Power and Light, it's difficult to bring gas into that market," he said.

As a LNG terminal operator, Cheniere is aiming for maximum flexibility for potential users of any proposed facilities. The Freeport, Texas, LNG terminal -- 30% owned by Cheniere, 60% owned by privately held Freeport Investment, and 10% owned by Contango Oil & Gas -- met all of Souki's specifications and was the first to be announced (NGW Jun. 25, '01,p8). Within a 60-mile radius of Freeport's numerous industrial parks, Souki is eyeing a 6 Bcf/d market.

The other sites for which Cheniere has secured options for LNG receiving terminals are Corpus Christi and Brownsville, Texas, and Sabine Pass, Louisiana. Like CMS's Lake Charles terminal, these sites are located either in primarily industrial areas or close enough to major pipeline hubs where high Btu content gas coming from LNG supply sources other than Trinidad is not an issue as it is with the Elba Island, Georgia, Cove Point, Maryland, and Everett, Massachusetts, LNG terminals.

There have been several key LNG developments for Cheniere in the past few months. Most recently the company filed for the Freeport terminal with the Federal Energy Regulatory Commission (FERC) and could make its next filing with FERC to build a second LNG facility early next year.

Given the number of developments on the regulatory front in the past six months, Souki expressed confidence that at the very least one of the four terminals could be authorized and built by 2007, citing a streamlined permitting process for offshore LNG receiving terminals by the Coast Guard, which gained jurisdiction from FERC in November, and FERC's decision in December to allow the construction of proprietary receiving terminals (NGW Dec. 23, '02,p1).

However, the Cheniere terminals would not be proprietary. "We have no intention of getting into the LNG chain as other than a terminal operator," said Souki, leaving the production, liquefaction, shipping, and marketing side to its future customers. "We are currently talking to half a dozen potential customers and expect to have one lined up for Freeport soon," said Souki. He declined to name specific contenders.

A further indication of how seriously Cheniere is taking its commitment to LNG can be seen in its recent decision to change its American Stock Exchange listing to LNG, from CXY.

--Madeline Jowdy

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To: Ed Ajootian who started this subject6/9/2003 4:55:00 PM
From: Ed Ajootian
   of 112

We will be riding the Natural Gas CrisisWave in many ways over the next 12 to 18 months. One of the best ways right now is in a small gas exploration company that is just plain 50%-80% undervalued versus normal valuations. This mispricing happens many times in the microcap world and ATP Oil and Gas Corp. (ATPG) is my current favorite.

ATPG looks to develop already-discovered offshore petroleum reserves not strategic to major or exploration-oriented oil and gas companies. Essentially, ATPG takes on projects from the major energy companies that are big for ATP, but way too small to make a difference in a major company. My great contact in the gas patch led me to ATPG as a great example of this type of company that is publicly traded.

The following is great example of how it all works from a Wall Street Transcript interview with Philip J. McPherson of C. K. Cooper: “Say Exxon Mobil is out in the Gulf of Mexico looking for a 100 Bcf natural gas target and they only find a 25 Bcf target. To them that amount of gas will not make a major impact to their bottom line, and there are still liabilities. A company like ATP goes to Exxon and says, ‘We want to take over your platform for this project, and we’ll assume the plugging and abandonment liabilities associated with drilling, and we'll offer an overriding interest in what we produce.’ This means that Exxon can get 10% of the revenues until a project dries up.”

One important aspect to look at when evaluating a company like ATPG--other than its current projects and reserves--is the company’s cash flow. The reason for this is that cash flow ultimately affects what ATPG will spend on the next year’s projects. They can’t very well go exploring for new reserves if they don’t have the resources to spend on the search. And being a smaller company, it isn’t able to borrow a lot so it must depend on its cash flow.

Where’s all this going? Well, according to Mr. McPherson, similar companies to ATPG sell historically for 3 to 4 times cash flow. This year, my estimates have the company coming in with cash flow in the $70 million range, or about $3.50 per share in cash flow. With ATPG closing today at $5.33, the stock now trades at about 1.5 times cash flow. So, as you can see, APTG is an extremely undervalued stock.

This company should literally be valued closer to $20 than $5.33. If they have the success I think they will have this year and gas prices go to $7 this summer and $15 in the REAL gas crisis this winter, as I believe they will, the company could generate $100 million of cash flow. That makes it a $350 million to $400 million-market cap company--today it’s a $108 million company.

We’ll put a buy under of $7 on ATPG and will look to hold the stock for a year or more, where you’ll only have to pay 15% capital gains on the 200%-300% profits we anticipate.


From Changewave newsletter dated today.

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To: Ed Ajootian who wrote (71)6/11/2003 7:24:20 AM
From: Ed Ajootian
   of 112
Greenspan Touts Value of LNG as 'Safety Valve'
(Copyright © 2003 Energy Intelligence Group, Inc.)
Oil Daily Wednesday, June 11, 2003

WASHINGTON -- The US must look to the importation of liquefied natural gas (LNG) as a "crucial safety valve" to reduce high natural gas prices, Federal Reserve Board Chairman Alan Greenspan told US lawmakers on Tuesday.

While LNG has been touted by the natural gas industry as the next logical step in increasing US natural gas supply, Greenspan's testimony will undoubtedly give greater credence to plans to increase the amount of LNG brought into the US.

Doing so will allow US policymakers some time to examine more critically the key questions of natural gas and overall energy policy, Greenspan told the House Energy and Commerce Committee during a hearing on potential fixes for current high natural gas prices.

Those key questions include whether to open more lands to new hydrocarbon drilling or to maintain existing environmental moratoriums, the construction of a natural gas pipeline from Alaska or the Canadian Arctic and even to examine the policy questions surrounding the use of nuclear power.

Greenspan was called before the committee to address the reasons and the macroeconomic impacts of the high natural gas prices, somewhere in the neighborhood of $6 per million British thermal units (MMBtu). To solve the problem as quickly as possible, Greenspan returned to one theme only -- imports of LNG.

In the simplest of economic terms, the current high prices stem from the inability of North American natural gas supplies to meet demand. The problem for the US, said Greenspan, is that "rising demand for natural gas, especially as a clean-burning source of electric power, is pressing against a supply essentially restricted to North American production."

Greenspan sees the US LNG market becoming the same as the existing crude oil marketplace, which has fully embraced imports from international supply sources to make up for the shortfall in domestic production. The result has been a marketplace free of the volatility of natural gas and should be for some time.

He noted that natural gas futures prices show an increase going out to 2009, on a heating oil equivalent basis, from less than $12/bbl to $24/bbl, while oil futures show only a $4/bbl increase over the same time period.

As an example of how the worldwide oil market can overcome supply disruptions, Greenspan pointed to the response of US refiners to the loss of Venezuelan production by purchasing crude from other exporting countries.

Such flexibility is necessary for the natural gas market and depends on an expansion of LNG import capacity. Without it, "imbalances in supply and demand must inevitably engender price volatility," he said.

Currently, there are three LNG import terminals in the US -- located in Massachusetts, Louisiana, and Georgia, with a fourth soon to be operational in Maryland.

The Federal Energy Regulatory Commission (FERC) has begun efforts to increase the number of LNG terminals in the US by revamping its approval policy for terminals in December 2002 (OD Dec.19,'02p5). Moving away from an open access policy that required terminals to accept any shipper of LNG, the new policy allows proprietary terminals, which allows the terminal operator to more closely control the flow of LNG to the terminal with their exporting operations.

Numerous plans are in the works to construct new import terminals -- notably Sempra's Hackberry terminal in Louisiana, and Cheniere Energy's attempts to construct a terminal on the Texas Gulf Coast.

Other plans to increase LNG terminal capacity rely on placing the terminals outside US borders to avoid community opposition over security and environmental concerns.

These projects include AES' Ocean Express project, which would rely on an LNG import terminal in the Bahamas that would send gas through an undersea pipeline to Florida. Other companies, notably Marathon and Sempra, have plans to construct terminals in Mexico and use existing pipeline infrastructure to carry the gas to the US.

As the largest natural gas market in the world, a number of countries are looking to increase their LNG imports to the US, including Trinidad, Russia, and numerous Middle Eastern countries. In November 2002, Algerian Energy Minister Chakib Khelil signed a LNG accord with Energy Secretary Spencer Abraham where both countries pledged to take steps to increase Algeria's LNG contribution to US markets.

Christian Schmollinger

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To: Ed Ajootian who wrote (72)6/11/2003 3:12:32 PM
From: DELT1970
   of 112
What are your targets for MSSN, Ed? Thanks for it.

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To: DELT1970 who wrote (73)6/22/2003 11:25:32 PM
From: Ed Ajootian
   of 112
No targets, I just think its undervalued here.

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To: Ed Ajootian who started this subject6/22/2003 11:26:07 PM
From: Ed Ajootian
   of 112
Freeport LNG Secures Chemical Giant Dow
(Copyright © 2003 Energy Intelligence Group, Inc.)
Oil Daily Monday, June 23, 2003

Dow Chemical, a $28 billion per year petrochemical business and significant consumer of natural gas, announced Friday that it intended to secure capacity in the proposed Freeport liquefied natural gas (LNG) terminal in Freeport, Texas (OD May1,p5). This will make the chemical giant the first end-user of natural gas in the US to look to LNG imports to ensure a reliable and presumably more cost efficient avenue to meeting its needs for natural gas feedstocks.

Dow signed up for 500 million cubic feet per day of capacity at the 1.5 billion cubic feet per day facility for 20 years starting in 2007. A $1.2 million initial payment will be paid to Freeport, pending a final agreement, though the total price was not disclosed. Cheniere Energy, a 30% shareholder in the project, has indicated previously that it was looking to earn a target price of between 30¢ to 35¢ per million Btu or about $68 million per year in service fees for a third of the capacity at Freeport. Other shareholders in Freeport LNG are investor Michael Smith with 60% and Contango Oil & Gas with 10%.

Keith Meyer, president of Cheniere LNG told Oil Daily, "Dow's decision to take capacity in the Freeport LNG receiving terminal is not only significant from the project perspective, but will serve as a guiding light for all major gas consumers to be proactive in an effort to pull imported gas supplies to the United States. This also helps to validate the idea of locating large LNG receiving terminals in close proximity to the large gas consumers and interstate pipelines along the Gulf Coast."

Dow Chemical consumes about 700 MMcf/d for its operations in the Texas Gulf Coast, all of which have been adversely affected by high natural gas prices over the past year. Companies such as Exxon Mobil who sell natural gas to end-users such as Dow on the other hand have made out very well.

Dow is looking to minimize these costs and is currently planning to purchase LNG directly from suppliers in the Atlantic basin, including Nigeria and Trinidad, Freeport LNG spokesman Nathan Will told Oil Daily.

"In spite of Dow's tremendous strides to reduce energy intensity and a historic focus on co-generation, energy efficiency and conservation, it continues to be challenged with unprecedented increases in costs for US hydrocarbons and energy -- particularly natural gas," Jody Sumrall, Dow's business manager for LNG and Texas Gas, said in a press release.

Dow has a large petrochemical complex located next door to the proposed site. Natural gas price volatility was one of the contributing factors in the shut down of the company's Union Carbide Texas City olefins plant that was recently completed, according to Dow spokeswoman Leslie Hatfield.

Madeline Jowdy

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To: Ed Ajootian who wrote (75)7/1/2003 10:35:51 AM
From: DELT1970
   of 112
Unit Corp is paying a 34% premium for PetroCorp, its Tulsa neighbor. Unit drills for clients (#5 land based driller in the US) and its own portfolio. Petro had already hi-graded its portfolio by selling Alabama and Canadian assets.

Unit Corp. (NYSE:UNT - News) , in a move to boost its presence in the oil and gas exploration sector, Tuesday said it agreed to acquire rival energy concern PetroCorp Inc. (AMEX:PEX - News) for $190 million in cash and stock.

PetroCorp, based in Tulsa, Okla., explores and develops oil and natural gas properties primarily in Texas and Oklahoma. Unit Corp., which is also based in Tulsa, is involved in oil and gas exploration, production and contract drilling.

The proposed deal consists of two million shares of Unit Corp., with the remainder in cash. Unit Corp. expects the deal to immediately add to earnings and cash flow per share.

The acquisition is subject to conditions, including approval of PetroCorp shareholders.

Monday, shares of PetroCorp closed at $11.15 on the American Stock Exchange, and Unit Corp.'s shares closed at $20.91 on the New York Stock Exchange (News - Websites).

Unit Corp. said about $101 million of the purchase price will be allocated for working capital, $78 million to proved reserves and the remaining $11 million to undeveloped leasehold and partnership interest.

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To: DELT1970 who wrote (76)7/1/2003 11:33:13 PM
From: Ed Ajootian
   of 112
I had mixed feelings when I saw this. Was glad because I owned some PEX, but sad that I hadn't gotten around to rebuilding my position yet.

Unit is getting a great deal here, about $1.20/mcfe. Do you know anything about Unit Corp? They look interesting, one of the few firms that's really trying to do both drilling and E&P work at the same time. I always thought the two businesses would match up well together since the E&P division could act as a tax shelter for the drilling division.

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To: Ed Ajootian who wrote (75)7/8/2003 11:12:06 PM
From: Ed Ajootian
   of 112
HORIZON: Early Leaders Emerge In Race To Build New US LNG Ports
(Copyright © 2003 Energy Intelligence Group, Inc.)
World Gas Intelligence Wednesday, July 2, 2003

The question these days seems to be not whether the US is a viable market for LNG but rather when, how, and from where more LNG can be delivered. Currently, around 20 proposals to enhance LNG receiving capacity through onshore, offshore, or Mexico-based terminals are in one stage or another of commercial or regulatory approval.

The US currently has about 1.8 billion cubic feet per day of receiving capacity, including a recent expansion of the Everett, Massachusetts, terminal. Upon the slated reopening of the Cove Point, Maryland, facility later this month, that should leap to 2.8 Bcf/d (WGI Jun.18,p1). Approved expansions of Lake Charles and Elba Island should bring the total for existing terminals up to a combined 4 Bcf/d. Since forecasts suggest that the US could be using 9 Bcf/d -- or nearly 70 million tons per year of LNG -- by 2010, a number of new facilities will likely be needed (WGI Oct.23,p5). But that number isn't as large as 20. Those that look to be good contenders to make the cut are mainly clustered along the Gulf Coast.

ChevronTexaco's Port Pelican application has been making its way through the US Coast Guard permitting process since late last year, with a decision expected by end-2003. Located offshore Louisiana about 50 miles south of Lake Charles, Port Pelican could start up as early as 2006, a point when new Atlantic Basin liquefaction facilities should be completed (WGI Apr.9,p4).

The Freeport LNG project on Quintana Island, southwest of Freeport, Texas, also looks promising for several reasons, starting with a blue-chip customer and a location in a heavily industrial and economically depressed area where any job-creating venture is likely to get solid local backing. Freeport shouldn't face regulatory impediments at the state level, and Federal Energy Regulatory Commission (FERC) approval is pending. Completion is set for 2007. Dow Chemical has provisionally agreed to bring 3.6 million tons/yr of LNG, or 500 million cubic feet per day of gas, into the facility from an unspecified source. Cheniere Energy came up with the Freeport project but has since sold a majority to small, privately held investment groups.

Cheniere has targeted two other sites: Sabine Pass, Louisiana, and Corpus Christi, Texas, each projected to have 2 Bcf/d of capacity, with completion targeted for 2007-08. At both sites, Cheniere has awarded a front-end engineering and design contract to Black and Veatch in anticipation of filing an application with the FERC in early 2004.

Exxon Mobil is looking at Sabine Pass, too, but on the Texas side of the border, about 80 miles east of Houston, for a possible 1 Bcf/d (7.7 million ton/yr) terminal (WGI Jun.25,p1). Exxon, which currently has no firm US import capacity, is evaluating other Gulf Coast locations, as well, including one in Louisiana. One reason for Exxon's relatively late indication of interest in US LNG was the regulatory environment. FERC's Hackberry decision changed that (WGI Jan.22,p1). Now Exxon can build its own terminal and not have to share it or worry about regulated tariffs if it does sell access to others.

Sempra's Cameron LNG project -- initiated by Dynegy -- to convert an unused LPG terminal at Hackberry, Louisiana, has preliminary FERC approval, and an environmental impact study is underway. A 2007 completion date is targeted. The company hasn't said whether the facility will be open-access. The location on Calcasieu Lake has a major drawback: potential shipping bottlenecks in the Lake Charles Channel. The existing Lake Charles terminal is further upstream.

Of three proposed LNG receiving terminals in the Bahamas, only two are active. The largest and apparently most promising is Tractebel's Calypso venture near Freeport, acquired from Enron last year. Output from the 830 MMcf/d complex would be shipped through a 96 mile pipeline to Florida. The other is AES' scheme to build a 550 MMcf/d facility on Ocean Cay that would be connected by a 65 mile pipeline to Florida. AES also would build a power plant in the Bahamas. Both have applications into the Bahamian government and into FERC for the pipeline access, and both are scheduling a 2006-07 startup (WGI Jun.4,p3). Given that a supply contract with end-user Florida Power & Light is a near necessity, both are unlikely to go through.

El Paso's Energy Bridge project may be up for sale, but its application is still wending its way through the US Coast Guard permitting process, giving it potential value to another company. Special tankers would have regasification equipment on board, eliminating the need for a conventional receiving terminal. Regasified LNG would be unloaded directly into a pipeline through a submerged docking buoy.

Another technological innovation would be use of salt caverns for storage. The US Energy Department recently endorsed a process developed by Houston-based Conversion Gas Imports that involves an innovative heat exchanger to allow direct injection of pressurized LNG or dense-phase vapor into salt caverns or pipelines. At a fraction of the cost, that would eliminate the need for both storage tanks and conventional regasification facilities (WGI May7,p8). Conversion Gas itself is participating in two projects, and its technology could be used in a third sponsored by Freeport McMoRan (Natural Gas Week Jun.23,p6).

Also enticing is Canadian refiner Irving Oil's recently resurrected plan for an LNG regasification in New Brunswick, Canada, to target New England through an expansion of the existing Maritimes and Northeast Pipeline.

By Barbara Shook in Houston and Madeline Jowdy in New York

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To: Ed Ajootian who wrote (78)8/8/2003 11:35:58 AM
From: Ed Ajootian
   of 112
Cheniere Energy Makes Progress on Gulf Coast LNG Projects

HOUSTON--August 8, 2003--Researched by (Industrial Information Resources, Incorporated; Houston, Texas). Cheniere Energy Incorporated (AMEX:LNG) (Houston Texas) recently awarded the Front End Engineering and Design (FEED) contracts for two of its four planned LNG receiving and regasification terminals planned for the Gulf Coast.

Cheniere awarded Black & Veatch Pritchard Incorporated (Overland Park, Kansas) the FEED contracts for its Sabine Pass, Louisiana (PEC 020051337) and Corpus Christi, Texas (PEC 01008551) LNG terminal sites. The FEED for both sites will be completed by September of 2003 and Cheniere Energy plans to file permits with the FERC in January 2004 for these two facilities.

The other members of the of the project team assembled by Cheniere are Project Technical Liaison Associates Incorporated (Spring, Texas) for the safety & permitting issues, Ecology and Environment Incorporated (AMEX:EEI) (Lancaster, New York) for environmental assessment and Shiner Moseley and Associates Incorporated (Corpus Christi, Texas) for marine engineering.

These two sites, combined with Cheniere Energy's partnership investment in Freeport LNG Development LP for their planned Freeport LNG terminal (PEC 01008554), will give the company a very strong presence in the Gulf Coast U.S. region. Deepwater access, available pipeline capacity and local demand for natural gas make these locations very appealing. Cheniere Energy hopes to be importing 5-6 Bcf/d of natural gas through its planned LNG receiving terminals by 2007.

North American is witnessing an increase in LNG project development as energy developers seek solutions to our growing energy needs. See related archived news article*: North American LNG Project Planning Exceeds $11 Billion as ExxonMobil Gas & Power Joins the Foray for additional information on the growing LNG industry.

*Access to's archive of over 2,100 news articles is available to Premium News Subscribers. Click Premium News for more details. (IIR) is the leading provider of global industrial market research. We specialize in helping companies develop information solutions to maximize their sales and marketing efforts. For more information on trends and upcoming construction activities in the terminals industry as well as other industrial sectors send inquiries to or visit us at


Too bad this thread died, I'll just use it to store articles I guess.

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