At least one investment house isn’t afraid of fossil fuels. And it happens to be one of the biggest in the world..That’s because Warren Buffett’s Berkshire Hathaway has doubled down on liquified natural gas (LNG) by taking an additional 50% stake in a US export terminal for a cool $3.3 billion in cash.. Warren BuffettWarren Buffett, the Oracle of Omaha .With the deal, Berkshire’s energy subsidiary increases its stake in the plant to 75%. It was already the operator of the Cove Point pipeline and storage terminal located in Lusby, Maryland..The facility is one of only seven functioning LNG terminals in the US and reportedly has capacity of 1.8 billion cubic feet per day with an additional 14.6 billion cubic feet of storage. It has long-term contracts with Japan’s Sumitomo Corp., which Berkshire also has a stake. .Although it’s chump change for the Oracle of Omaha — Berkshire is worth $750 billion — it’s just the latest in a series of contrarian energy buys as others divest of energy holdings..In March, Berkshire spent $372 million to increase its ownership stake in Los Angeles-based Occidental Petroleum to 25% and presently owns about 6% of Chevron worth $22 billion. In Canada, it owns Calgary-based AltaLink, Alberta’s largest electricity provider..Overall, it owns about $130 billion worth of energy assets..Even though natural gas prices are down more than 40% this year, Buffett clearly lives by his ‘buy low, sell high’ mantra. It comes as the US is poised to become the world’s largest LNG exporter amid energy security concerns in Europe stemming from the war in Ukraine..“It builds on their long-term theme of energy resources becoming more valuable and ownership of one of only a few US LNG exporters,” Bill Stone, chief investment officer at Glenview Trust and Berkshire shareholder told CNBC..“Buffett has liked pipelines for a long time, given their toll bridge-type revenues rather than pure commodity exposure, and this is likely similar. Natural gas prices are down a ton, but I think most of these exporters work on long-term take or pay contracts.”.By contrast Canada is a relative latecomer to the LNG game. The $40-billion LNG Canada project — a partnership between Shell, Petronas, Kogas, Mitsubishi and PetroChina — isn’t due to begin exports until 2025..Unlike Buffett, Canada’s government sees a shrinking role for natural gas. Last month the Canadian Energy Regulator forecast a 68% reduction in Canadian natural gas production to reach net zero targets.
At least one investment house isn’t afraid of fossil fuels. And it happens to be one of the biggest in the world..That’s because Warren Buffett’s Berkshire Hathaway has doubled down on liquified natural gas (LNG) by taking an additional 50% stake in a US export terminal for a cool $3.3 billion in cash.. Warren BuffettWarren Buffett, the Oracle of Omaha .With the deal, Berkshire’s energy subsidiary increases its stake in the plant to 75%. It was already the operator of the Cove Point pipeline and storage terminal located in Lusby, Maryland..The facility is one of only seven functioning LNG terminals in the US and reportedly has capacity of 1.8 billion cubic feet per day with an additional 14.6 billion cubic feet of storage. It has long-term contracts with Japan’s Sumitomo Corp., which Berkshire also has a stake. .Although it’s chump change for the Oracle of Omaha — Berkshire is worth $750 billion — it’s just the latest in a series of contrarian energy buys as others divest of energy holdings..In March, Berkshire spent $372 million to increase its ownership stake in Los Angeles-based Occidental Petroleum to 25% and presently owns about 6% of Chevron worth $22 billion. In Canada, it owns Calgary-based AltaLink, Alberta’s largest electricity provider..Overall, it owns about $130 billion worth of energy assets..Even though natural gas prices are down more than 40% this year, Buffett clearly lives by his ‘buy low, sell high’ mantra. It comes as the US is poised to become the world’s largest LNG exporter amid energy security concerns in Europe stemming from the war in Ukraine..“It builds on their long-term theme of energy resources becoming more valuable and ownership of one of only a few US LNG exporters,” Bill Stone, chief investment officer at Glenview Trust and Berkshire shareholder told CNBC..“Buffett has liked pipelines for a long time, given their toll bridge-type revenues rather than pure commodity exposure, and this is likely similar. Natural gas prices are down a ton, but I think most of these exporters work on long-term take or pay contracts.”.By contrast Canada is a relative latecomer to the LNG game. The $40-billion LNG Canada project — a partnership between Shell, Petronas, Kogas, Mitsubishi and PetroChina — isn’t due to begin exports until 2025..Unlike Buffett, Canada’s government sees a shrinking role for natural gas. Last month the Canadian Energy Regulator forecast a 68% reduction in Canadian natural gas production to reach net zero targets.
