Strategy Change to Incremental Expansion Makes Sense but Imperils Stage V Expansion

Cheniere Energy Partners sits between North American natural gas producers and global liquefied natural gas consumers. It seeks to strike long-term purchase agreements with producers and consumers alike. These agreements allow the firm to lock in a consistent spread between the cost of gas and the fees it charges customers. Of the volumes Cheniere produces, 90% are linked to these arrangements. The agreements, in part pioneered by Cheniere, last two decades. Their long duration and strength give investors high confidence in their cash generation.