The Cheniere Energy Inc. (NYSEMKT: LNG) stock price opened 1.5% higher today (Thursday). The boost came as natural gas futures gained a slight 0.07% this morning over temperate U.S. weather forecasts.
But LNG stock has seen a big sell-off recently. The liquefied natural gas (LNG) company has declined 7.4% so far in 2015. Yesterday (Wednesday), it closed at its lowest level of the year, falling 3.2% during the session and settling at $65.17 a share.
Cheniere (NYSEMKT: LNG) stock had a strong start this year in the face of falling natural gas prices. In January, shares of LNG gained 1.4%, while natural gas dropped 6.6%. The stock shot up the following month, soaring 13% between Jan. 30 and Feb. 27.
After that, Cheniere (NYSEMKT: LNG) gradually sold off. It shed 4% in March and 10.8% in the second quarter.
It's clear that Cheniere has been beaten down over the short term. Let's take a look at the long-term picture for the energy firm...
Now that LNG export regulations are loosened up, the United States is expected to provide up to 12% of worldwide LNG exports over the next five years.
"The idea of U.S. natural gas exports is so strong and unstoppable, it has the power to change the world," Money Morning Global Energy Strategist Dr. Kent Moors said about this LNG news. "It's the result of one of the biggest reversals of fortune I have ever witnessed."
Cheniere will be at the forefront of the U.S. LNG revolution. Last December, the company received approval from the U.S. Department of Energy to export LNG. This is the first time the federal government has approved an export project in over four decades.
The company is already starting to transform its import facilities into export facilities. Once that's completed, Cheniere will be processing more than 1 billion cubic feet of natural gas every day. Its two Texas terminals - Sabine Pass and Corpus Christi - are expected to be completed in early 2016.
Cheniere's export operations show huge growth potential, which is bullish for LNG stock despite short-term volatility this year.
All of this begs the question...
Cheniere is a healthy long-term investment for one reason: skyrocketing natural gas demand.
Global LNG demand has doubled over the last 15 years. According to the International Energy Agency (IEA), it's expected to double again by 2025.
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In fact, natural gas demand will keep growing for the foreseeable future. The IEA reported Japan, South Korea, and Taiwan will make up the largest percentage of natural gas consumers in the coming decades. Meanwhile, China alone expects to triple its consumption by 2020.
These countries will provide Cheniere a massive stream of revenue thanks to the expansion of the Panama Canal.
Most LNG gas tankers are too large to travel through the canal. The passageway can only accommodate ships less than 1,000 feet long and 106 feet wide.
But a project to widen the canal will be completed by next spring - right when Cheniere is expected to start exporting. The newly expanded canal will shorten transport time to Asia by 11 days.
Moors recommended Cheniere (NYSEMKT: LNG) stock back in 2011. It has leaped more than 517% since then. That insane growth reinforces LNG's long-term potential, especially as the United States begins export operations.
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