If it appears that Cheniere Energy Inc. is just ahead of the pack in the LNG markets race, look again. The Houston-based company with the mnemonic stock symbol—LNG—has lapped the field and is far, far ahead, leaving a host of ambitious competitors scrambling to follow the leader.

“I’d like to think that we were just very smart, but one of the problems we had was that a disruptive technology came into play in the United States,” said Mark Stubbe, Cheniere’s senior vice president for markets and trading. “Obviously, that was horizontal drilling and the whole fracking expansion, which effectively rendered our business model kaput. So, our focus was either go bankrupt or change.”

The company’s change has resulted in a market capitalization of $13.8 billion and a stock price that has doubled in the last 12 months. Stubbe shed light on the company’s major projects—Sabine Pass LNG Terminal and Corpus Christi Liquefaction—and offered insight into global LNG markets as a panelist at the recent KPMG Global Energy Conference in Houston.

In retrospect, he said, the Cheniere team attributes success to its laser-beam focus on what was realistically achievable and ignoring “can’t do” conventional wisdom.

“As we started out in this, many of us were told that we’re never going to be able to export hydrocarbons,” Stubbe said. “‘We’re never going to be able to build an LNG facility because [the Federal Energy Regulatory Commission] doesn’t know how to do it.’ The driving force was to forget about that, go after the fundamentals, go after the facts.”

Cheniere discovered that the regulatory terrain was not only navigable but beneficial. “Once you get into the law of regulatory issues and trade agreements, the government regulations are fairly supportive of export,” Stubbe said. “So that’s what we were able to do to take advantage of—not believing what the world was telling us but getting out and trying something new.”

The discussion was moderated by Mary Hemmingsen, KPMG’s Toronto-based partner for advisory services, specializing in LNG, power and utilities. Other panelists included Renee Klimczak, president and CEO of the Jarrah Group; and George O’Leary, vice president of oil service, E&C and coal research at Tudor, Pickering, Holt & Co. All see vast potential for the growing industry if players can move quickly enough to take advantage.

“Cheniere’s position is as a leader in the U.S. market—the first project to get permitted, the first to be out truly seeking an [engineering and construction] contractor to get field studies done—it’s a huge benefit,” said O’Leary. “What you’re in is a labor market that is much less constrained than it will be when we start building these. You didn’t have competing projects being built in the U.S., so pushing a lump sum turnkey contract is beautiful, and with Bechtel, what you get is an experienced LNG builder that executes better than most.”

Not all players will be as fortunate as Cheniere, however.

“At the end of the day, even if DOE [Department of Energy] approved all of the projects tomorrow, they would not be built,” said Klimczak. “What underpins these projects, first and foremost, is the contract to a customer. For that to occur, there must be demand. Of all the projects that are before the regulatory agencies today, you might say 20% to 25% of them will actually get built. It’s not because there are not a lot of good projects, but if you’re looking out to 2025 or 2030, that’s probably about what we’re looking at.”

The foundation of success, Stubbe believes, is competition.

“If you look at it overall, the reason that the United States and North America in general—because I think Mexico will be able to get there in the next five to 10 years—have succeeded is competition,” he said. “It drives lots of innovative thinking. You have all this competition that’s built around the most integrated, flexible energy system in the world, so how can you not be successful?”

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