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Cheniere (LNG) stock has climbed 126% over the past year - and we believe there's a lot more to come.
Houston-based Cheniere Energy Inc. (NYSE MKT: LNG) is the biggest name in liquefied natural gas (LNG) exporting. It was the first company that the U.S. Energy Department granted approval for exporting to countries that do not have a Free Trade Agreement with the United States.
Cheniere's head start on competitors gives it what Forbes called a near-monopoly for the next few years.
That means Cheniere is leading the way for companies trying to profit from the LNG export revolution - what Money Morning Global Energy Strategist Dr. Kent Moors calls "one of the best investment opportunities of the decade."
"The things we see happening in 2014 are really going to boost share prices [of the companies involved in the LNG business]," said Moors. "By definition, revolutions bring about dramatic change. And whether you're talking about energy, technology or consumer products, periods of dramatic change can be the source of a deluge of profits for investors who know where to look - and are then willing to act."
Cheniere (LNG) Stock: Expect More Gains in 2014
Moors first alerted investors to LNG's profit potential in 2010, when Cheniere was trading at just $6 per share.
Now it's trading near $46 a share, making it our favorite LNG stock to buy today.
With financing in place, Cheniere has started construction on a new $7.8 billion LNG construction project at the Sabine Pass facility in Louisiana.
The facility was originally built in 2008 for importing natural gas. But thanks to drillers tapping into hard-to-reach gas reserves through fracking, the United States' gas supply is growing to record amounts. That's how Cheniere beat the competition to becoming export-ready.
Three of an initial four LNG trains (LNG processing lines) are being built now. The total project calls for six trains, with a capacity of 27 million tons per year.
The first exports from the facility should occur in late 2015.
The key with any LNG project is to have ready buyers, eager to snap up the LNG you are selling - and Cheniere has had no problems getting customers...
The company already has signed 20-year contracts to sell LNG from these first four trains to Britain's BG Group PLC ADR (OTC: BRGYY) and Centrica PLC ADR (OTC: CPYYY), France's Total SA (NYSE ADR: TOT), India's Gail, South Korea's Kogas, and Spain's Gas Natural Fenosa.
The company also has another project underway to develop an LNG terminal near Corpus Christi, Texas. This three-train facility will have a peak capacity of 15 million tons per year.
Even though this facility has yet to receive government approval, it already has its first customer.
Indonesia's state-owned energy company, PT Pertamina, has signed a 20-year agreement to purchase 0.8 million tons per year of LNG from the Corpus Christi terminal. The $3.50 price agreed to was higher than previous contracts.
All of this good news propelled Cheniere Energy's stock in 2013. It more than doubled, soaring 136%.
Investors haven't missed the profit opportunity here. We expect Cheniere to keep delivering - and serve as a solid "core" energy investment for your portfolio.
"Cheniere will stand as a dramatic example of just how fast - and how much - this essentially new LNG export market is going to advance," said Moors.
Cheniere (LNG) stock closed at $45.95 today (Wednesday).
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