NEW YORK (TheStreet) -- Cheniere Energy (LNG) - Get Report offers a way to invest in the U.S. liquefied natural-gas business, which is expected to expand in the coming years, but declining prices could hurt the company.

Since the beginning of the year, shares of the company have spiked by more than 66%. Let's examine the recent developments related to the company and its valuation to determine if it is still worth investing in.

The company develops two terminals to produce and export liquefied natural gas: Sabine Pass and Corpus Christi.

The former is expected to start production by the end of next year in two of its six trains, and the latter is projected to commence by 2018-2019. All of Cheniere Energy's nine trains from these two terminals will be fully operational by that time and will eventually have more than 40 million tons per annum from the Sabine Pass and Corpus Christi liquefaction projects.

Cheniere Energy has closed long-term contracts for nearly three-quarters of its volume in Sabine Pass and 56% in its Corpus Christi project.

As Cheniere Energy keeps closing additional contracts, this reduces its risk related to finding clients for liquefied natural gas. But this doesn't mean that the company won't still have exposure for risk related to natural-gas prices.

These contracts are linked to natural-gas prices in the U.S. called the Henry Hub, which is trading at about $4.1. If prices were to come down, this could reduce Cheniere Energy's revenue.

Natural-gas prices are expected to fall by 14% in 2015, compared with this year, according to the recent outlook from the Energy Information Administration.

Clouding the issue for investors, Cheniere Energy will only start to operate its facilities by the end of next year and all its projects by 2019-2020. In order to determine its valuation, investors need to rely on its projections.

Based on Cheniere Energy's estimates, the earnings before interest, taxes, depreciation and amortization for its two projects and the nine trains will between $3.3 billion and $4.3 billion. Considering the company's enterprise value is $24.2 billion, this means, that its EV/EBITDA is between 5.6 and 7.3, or an average of 6.5.

This isn't a high number considering that the EV/EBITDA in the oil and gas distribution industry is 15.5. But keep in mind that Cheniere Energy's enterprise value to EBITDA is only four to five years down the line and heavily relies on the future prices of natural gas and oil.

The company recently obtained $1.5 billion from EIG Management to finance the construction and development of its Corpus Christi Liquefaction Project, which is expected to start construction next year. This is another stepping stone for the company toward financing and constructing this terminal.

It is worth mentioning that this week, Cheniere Energy subsidiary Cheniere Energy Partners LP Holdings (CQH)  announced a public offering of 10 million shares for a target price of $23.25 a share. The proceeds from this secondary offering will go toward buying its stocks from Cheniere Energy.

The move is expected to reduce Cheniere Energy's holding in the subsidiary to 80.1%. This news didn't go over well with shareholders of Cheniere Energy Partners, and its stock has fallen by 7% since the announcement was made. 

The result may be a diluting effect on the unit's stock. Nonetheless, it didn't adversely affect shares of Cheniere Energy.

Cheniere Energy is still the main way to invest in the U.S natural-gas boom, and its valuation, at face value, doesn't seem too high compared to the market industry. But keep in mind that the distribution will commence four or five years from now, and the global and local developments in the natural-gas market may not be favorable for the company, which could reduce revenue.

At the time of publication, the author held no positions in any of the stocks mentioned.

This article is commentary from an outside contributor, separate from TheStreet's news coverage.

TheStreet Ratings team rates CHENIERE ENERGY INC as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:

"We rate CHENIERE ENERGY INC (LNG) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. Among the areas we feel are negative, one of the most important has been weak operating cash flow."

You can view the full analysis from the report here: LNG Ratings Report