Subscribe to Money Morning get daily headlines subscribe now! Money Morning Private Briefing today's private briefing Access Your Profit Alerts

Natural Gas Companies: LNG Export Boom Still on the Launchpad

Anyone investing in natural gas companies is eagerly awaiting news that the liquefied natural gas (LNG) export boom is officially underway…

While we still have to wait, the good news is that last week Department of Energy Secretary Ernest Moniz told Reuters his department will go through the applications as quickly as possible. He added that he expects the Energy Department to conduct a “fair amount of action” regarding the applications this year.

This falls in step with the Obama Administration’s energy initiatives, which include a push for the development of “a global market for natural gas.”

This global natgas market will replace the current regional gas markets only if there are large exports of cheap natural gas from the U.S.

Such exports are one main reason Money Morning Global Energy Strategist Dr. Kent Moors is bullish on natural gas prices in the years ahead.

He’s also bullish about the prospects for investors in certain natural gas companies – especially ones positioning to profit from Asia’s need for LNG…

The Sea Route to Asia Paved With Riches

As pointed out by Money Morning Resource Specialist Peter Krauth, selling LNG to Asian countries such as Japan, South Korea and increasingly China will be a lucrative business in the years ahead.

Japan and South Korea are the biggest importers of LNG. Japan, in the year ending in March, imported a record 87 million tons of LNG after shutting down 48 of the country’s 50 nuclear reactors.  

That is more than one-third of the world's LNG exports of 240 million tons in 2011.

South Korea this year also is facing some nuclear plant shutdowns. South Korean imports were up 32.1% from a year ago in May to 2.9 million tons of LNG. Korea Gas, the world's largest corporate purchaser of LNG, said it would raise inventory levels to 70% of capacity from 60%, which translates to 396,000 tons of LNG. 

The major profit opportunity for U.S. natural gas companies lies in the huge price differential between natural gas in the U.S., at around $4 per million cubic feet, and LNG in Asia that is selling for about $14-$14.50 per million cubic feet.

Join the conversation. Click here to jump to comments…

  1. Barry Murray | July 12, 2013

    Of course as the Alaska editor of online MiningMagazines I really don't know anything about energy issues, having learned in 1955 about the importance of pipelines feeding sandfrack oil production in Wyoming, and then again as an Alaskan who voted for Palin for governor because she somehow was going to piping North Slope gas alongside the Alcan Highway the U.S. funded, I know that a small port town in Oregon voted down a LPG terminal for all the wrong reasons.
    My personal 75-year old opinion on natural gas, for what it is worth in this battle for control of what the green National Geographic Magazine printed back in the First Energy Shortage as a 250 year supply is that as a normal boy-child I learned that when flaring off farts with a wooden match without getting burned, the trick was to wear cotton underwear.

  2. Antony | August 1, 2013

    this is all i could find about the biggest companies in the gas industry

Leave a Reply

Your email address will not be published. Required fields are marked *

Some HTML is OK