Replies to post #89584 on Mohacsy's Safe Portfolio Member Forum

[cgavin5]

Opened PLTR at 10.52. Play money.

[dexprs]

Short term trade or a hold for you?

[Elroy Jetson]

ET has an uneconomic LNG model, even in good times.


ABBV is still paying our 6.85% dividend, based on our purchase price.

It's long overdue that the various 'schemes' and 'deals' to keep generics off the market ends. It's a perversion of patent law - and every major pharma company has been doing this. It's bullshit.

[Elroy Jetson]

LNG produced in North America currently has to pay $3 per mmBTU for natural gas for a product that sells for $7 to $12 /mmBTU.

They're competing against producers like Exxon-Mobil in Papua New Guinea, Qatar, Shell in Mozambique, and Chevron in North Western Australia and other locations where natural gas is effectively free because it has so few alternate local uses.

So even though natural gas is cheaper in the US than many parts of the world, a big bonanza for consumers and industry here, producing LNG here is working with a huge cost disadvantage - which is why Chevron and others cancelled all of their North America LNG projects a couple of years ago.


Everyone is trying to reduce the cost of liquefaction, currently about $0.92, through enormous scale of new mega-plants but those in North America are still selling a product costing $4 which costs others $1. And the cost for natural gas in North America will rise as the economy recovers.

ET, Cheniere and some others push ahead, but this is only going to periodically give them some good years followed by many years of losses. It's a fools errand.