Cheniere Energy stock pops 4% on talks to boost LNG exports to China

KEY POINTS

• Cheniere Energy said it has held "extensive negotiations" to increase LNG shipments to China.
• The statement came after the U.S. Commerce Department announced an agreement to open the Chinese market to certain U.S. exports, including natural gas.

The Asia Vision LNG carrier ship sits docked at the Cheniere Energy Inc. terminal in this aerial photograph taken over Sabine Pass, Texas.

Lindsey Janies | Bloomberg | Getty Images

Shares of Cheniere Energy rose as much as 4 percent after the company revealed it has held "extensive negotiations" with Chinese state-owned companies to increase liquefied natural gas exports to China.

The stock closed up more than 3 percent on Friday.

The Commerce Department announced on Thursday it had reached a deal with China to open the world's second largest economy to certain U.S. exports, including LNG. The agreement gives the country's state-controlled firms the green light to enter into long-term purchasing contracts with U.S. suppliers.

Cheniere Energy operates the only LNG export terminal in the lower 48 United States. It has sold nine LNG cargoes to China since its Sabine Pass terminal in Louisiana opened in 2016, all of which were priced on the spot market, Reuters reported.

"We have had extensive negotiations with the Chinese over the last month," Cheniere spokesman Eben Burnham-Snyder told Reuters.

China is the fastest growing market for LNG, according to energy research firm Wood Mackenzie, but analysts told CNBC on Friday that U.S. firms face a number of obstacles to tapping into that growth.