Important Updates for Investors
Carla Pasternak's Premiere Issue of High-Yield International Just
Released
Income expert Carla Pasternak's debut issue of High-Yield
International covers a Taiwanese manufacturer yielding 9.5%... a
rare Mexican monopoly yielding 13.4%... and other top-performing
investments yielding up to 19.0%.
Government's Biofuel Timetable Could Spell +15,900% Growth
+15,900% growth might seem far-fetched... but it's not. In fact, it
is mandated by law. And I've identified the ONLY stock positioned to
capture this growth.
The
Silver Lining to a Falling Dollar
Despite the U.S. national debt, there is a silver lining for income
investors. This massive spending, combined with movement out of U.S.
Treasuries, is going to take its toll on the dollar, and
international income investors could reap the rewards in the form of
higher dividends. |
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How
to Invest in the Soon-to-be Booming Liquefied Natural Gas
Industry |
Published:
March 3, 2008
Although it may seem hard to
believe, the United States used to be the largest producer of
oil in the world and was largely independent of foreign crude
imports.
But this all changed several decades ago -- U.S. production topped out
in 1972 and consumption
has continued to increase.
Similar to the experience in oil,
another cycle in a major U.S. energy source is coming to an end.
In 2001, U.S. natural gas production hit a total of 53.7 billion
cubic feet per day and has yet to surpass that peak.
The Department of Energy and most prominent energy analysts expect that
U.S. production will, at best, grow only slightly over the next 25
years.
Meanwhile, natural gas demand is growing at a pace that's set to far outstrip
any modest increases in production in the coming years. Just as with oil,
that trend spells rising import dependence for the U.S. gas market.
In the past, the main source of U.S. natural gas imports has
been Canada. Of
the roughly 9 billion cubic feet per day of U.S. imports
required in 2006, nearly 90% was imported from Canada via
pipelines. Canada is conveniently close to the U.S. and is stable
politically -- it's a reliable trading partner.
Unfortunately, Canada won't be able to meet the growing gas
consumption needs in the U.S. Canadian gas production has also hit a wall
recently, and remains roughly flat with 2001 production levels.
Meanwhile, Canada's own consumption of gas is growing at nearly +6% per
year -- that means less gas is available for export to the U.S.
That raises a key question. Namely, if Canada can't supply the U.S. with
the gas it needs, where exactly is it going to come from?
Enter a technology known as liquefied natural gas (LNG). LNG is not a
different fuel than natural gas; rather, its just natural gas in liquid
form. Natural gas is comprised primarily of methane, a colorless
hydrocarbon gas. Or at least, it's a gas at room temperature; when
cooled to -160 degrees Celsius (-260 Fahrenheit) natural gas liquefies.
Like all gases, when methane liquefies, it shrinks in size -- LNG takes
up less than 0.2% by volume of an equivalent quantity of methane in
gaseous form.
LNG can be loaded onto specialized tanker ships and transported by sea
just like crude oil. Before the advent of LNG, almost all gas was moved
by pipeline. But with LNG,
countries are no longer are bound to import gas only from adjacent nations
via existing pipes. It's possible to transport gas hundreds or even
thousands of miles just as easily.
And consider that some large and prolific natural gas reserves
are located in fields too far from existing pipelines to be
moved by pipeline. LNG allows producers to efficiently exploit
these fields and transport that gas to market where it's
desperately in demand. Before LNG, these remote gas fields had no real value.
| By 2015, the U.S. Department of Energy projects that LNG will account
for a larger share of U.S. natural gas imports than those from Canada.
And as my chart shows, by 2030 that same agency expects LNG imports to account
for nearly 5 trillion cubic feet per year.
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Of course, it's not just the U.S. that's likely to see rising LNG trade.
Some countries, such as Japan and Korea, are already major importers of
LNG. In fact, in terms of current trade the U.S. is still a bit player, importing just 16.6
billion cubic meters of LNG in 2006. In 2006, Japan imported
more than 81 billion cubic meters of natural gas in LNG form,
equivalent to some 96% of total Japanese consumption that year.
And South Korea is just as dependant on LNG technologies today. Out of
the nation's 34.2 billion cubic meters of gas consumption in 2006, no
less than 34.1 billion cubic meters were imported in the form of LNG,
primarily from the Middle East and Malaysia.
But there's another, even more significant tidal wave of demand in Asia
on the horizon -- China. China accepted its very first shipment of LNG
in 2006, a total of just 1 billion cubic meters, delivered from
Australia. But that's set to become a much larger figure in coming years
-- by 2015, analysts estimate that China will need to import as much as
45 billion cubic meters worth of LNG. That would make China one of the
world's largest LNG consumers.
With these points in mind, my staff and I scoured the market in
search of a handful of companies with exposure to the explosion
of LNG trade in
coming years. In the text that follows, we profile three of our
favorites. . .
Important Note: In the
remainder of this article,
StreetAuthority Market
Advisor editor Paul Tracy provides an in-depth
profile of three of the best plays on the budding LNG industry. These three companies
are well-positioned to handle the surging consumption of natural
gas and have projected long-term growth estimates of up to
+50%! However, in order to view the remainder of this
article, you'll need to subscribe to our premium investing
newsletter --
Market
Advisor. After you subscribe, you'll
receive immediate access to this full article, as well as our
monthly
Market
Advisor newsletter and a host of
additional premium content. Please visit one of the following
links to continue. . .
-- Paul Tracy
Editor
StreetAuthority
Market Advisor
| To
receive in-depth guidance on today's leading investing
opportunities each month, plus access to five model
portfolios, please subscribe to Paul Tracy's premium investment
newsletter -- the StreetAuthority
Market Advisor. |
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