BNN - Business News Network - tv interview [est. time: 3:41]:
How one company's pioneering technology is changing the Liquefied Natural Gas (LNG) market in North America -- and abroad
In short, I think this will be one of the best trades the energy market sees over the next decade, with one company already dominating this brand-new sector.
It's LNG – liquefied natural gas. Moving it around has turned into one of the most profitable businesses in the global energy patch.
LNG is created by cooling natural gas to minus-256 degrees Fahrenheit, which transforms the gas into an easily transportable – and much more economic – liquid form... one that is 1/600th the volume of regular natural gas.
Of course, large-scale users of natural gas prefer to deal with the regular kind – not liquid and frozen.
That's how LNG works: Companies liquefy the gas to move it, and then “re-gasify” the natural gas to use it.
LNG is the clean, cheap fuel of choice for the world right now. It has become a true global market.
Here's why it is a great trade (and what most investment analysts don't yet realize)...
The market is willing to pay for LNG's rapid growth – SAFE growth.
That's because LNG isn't dependent on the commodity boom to continue growing quickly and profitably. Nor does it need China to grow quickly and appreciably for its own success to continue.
It is an its own insulated sector... fast-rising and hugely profitable. But it's LNG's sub-sector that I expect to deliver some of the biggest gains.
That sub-sector is LNG shipping – a big new profit center in the Global Energy Patch.
In fact LNG tankers – the vessels that transport all this LNG – are can earning gross margins up to 89% – one of the most profitable margins of any business I can think of.
Meanwhile the LNG shipping market continues to be extremely tight. Right now there is ZERO extra capacity. And in the last 15 months, day rates for LNG tankers have more than tripled, from $35,000 a day to $90,000 to now $150,000/day.
What's more, my # 1 company in the LNG play – one of the most profitable trades in my OGIB portfolio – has the highest leverage to LNG day rates in the world.
That's what makes it the ultimate pure play in LNG. It is the “swing supplier” of LNG carriers. They are the only carrier with spare capacity enough to take advantage of the tightness in the market and fast rising day rates.
They're not just dominating today's LNG shipping market; they are also poised to capitalize even more significantly on the future of LNG: Floating LNG import terminals.
It turns regular LNG ships into these mobile, floating terminals—at a cheaper cost than building them new. This is the future – and this company is the world leader in this growing space.
For investors, it's a dream opportunity. Not only does this company pay a great dividend, but it's one of the top growth companies in the Energy Patch. I expect this company to increase its dividend in each of the next two years.
I'm making my full 22-page research report on this company available – but only for a limited time, and only to readers who take my weekly OGIB Free Alerts e-Letter.
To get my full research – the entire investment briefing, hand-picked from my OGIB portfolio – simply add your email to the box above.
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Simple. I want you to subscribe to my research.
We are now in an Oil Bull Market. From exploration and discovery plays to the booming energy services sector – I'm expecting good to great returns throughout 2012 – and beyond.
Strictly speaking, the oil & gas markets represent one of the few remaining ways small investors can accumulate major wealth. And the easiest way to get started on that track... is to get my Free Alerts.
I only send my Alerts when my team and I have meaningful insights to share... the kind that can put you in a position to capitalize time and time again. Of course you can opt out anytime with one easy click of your mouse. But I'm confident you'll soon see that my independent oil & gas research is the best of its kind.
I urge you to join my fast-growing group of readers today – You'll be glad you did.
Keith Schaefer, Publisher
Oil & Gas Investments Bulletin