How Will Natural Gas Fare in the Energy Transition?

CNBC's Fast Money
|

Automatic TRANSCRIPT

Welcome occurred oil on a wild ride today. After opec slashed global oil demand forecast for next year the organization citing harsher corona virus crackdowns across the globe energy so the worst performing sector this year. But our next guest says there's one name the space that is fueling up for some gains. Let's welcome back kate fateh. Ceo of grace capital. Kate great to see you again. You're looking at chenier energy. What's your top reason to be engineer. So okay bottom line. The world needs energy. Okay so there's a energy demand story and then those chenier money story. We all want energy the comfort of knowable sources. But this is not possible. Can we need an src. Balance sustainability and reliability and cost Energy gas. Natural gas is the way allergy can play the role chenier exports allergy globally. If you can believe it melissa. Twenty five percent of energy globally still comes from coal. Imagine natural gas replacing all of that. So that's the energy story in terms of chenier seven percent growing dividend. They probably went through the worst environment for energy this year and they made it valuation this cheap. The fundamentals are good. There's no commodity price risk. These are take or pay contracts. Okay that means they get paid no matter what there's no volume whisk there's no price rates so that that's why electioneer and that seven percent dividend is therefore covered karen. You've looked at this name in the past. I'm just wondering if i hear what you're saying about tigger pay contracts and that that's a steady stream of income which is good and investors like what about the longer term biden administration if they're against fracking. We'll see maybe they supply of natural gas available to be in a pipeline ship decreases. Does that worry you. At least you know we have the. Us is awash natural gas. We probably have a hundred year supply of natural gas fracking. No fracking so natural in. It's really cheap. Natural gas is like really cheap. Right now So it's not something that keeps me up at night. Do you have to believe kate. In the overall energy story in order to believe in chenier or can you see the sector overall sputtering little bit if you will. If they're more lockdown place in the short term yes you can see that bottom line. The world needs energy. i would love for. It's all come from solar wind. Biomass were not there yet. And we're not going to be there for a while so you need energy. Natural gas is better than coal gases. Better than oil. And that's why. I think chenier is the way to play it again. You don't want you're not worried about the price will going up going down. What's going to happen opec this that note kate. Great to see you thank you.

Coming up next