How To Play the Rise of LNG

There are a number of big trends forming in favor of liquefied natural gas, or LNG.

Last year was a big year for LNG. We saw a wave of new capacity hit the market. We had new LNG terminals take their first deliveries in 2009 — in Kuwait, Canada, Brazil and Argentina. New facilities opened in the U.K. And China and India also imported more LNG.

In the great quest to boost energy supplies, LNG could get much bigger. It makes up only 7% of natural gas supplies today, but LNG trade volumes are up 65% since 2000. Industry forecasts call for another 180% increase over the next 10 years. Nearly every big oil and gas company is upping its LNG capacity.

LNG Capacity Potential

So how big can it get? I think it’s clear there is a lot of room for growth. There are big untapped gas reserves off the coast of Africa and in the South Pacific and huge LNG expansion projects happening in Australia and Qatar. Major investments are going toward building facilities to liquefy the gas so it can be shipped to distant markets. And that’s going to be a boon for the companies that supply all that goes with LNG — the pipes, cold boxes, heat exchangers, storage systems and lots more. Turns out there are great opportunities here and most are still in the early stages, like the one I just recommended to Capital & Crisis readers.

The Daily Reckoning