20 Nov Expanding your portfolio through LNG Investments
LNG or Liquid Natural Gas Investments has grown in its popularity amongst stock holders and investors. And while some companies have seen a bit of a decline, the supply and demand realities have not diminished. There will always be the need for someone to buy natural gas somewhere in the world. Where investors need to be conscientious is when they invest in a LNG company. LNG investments must be with a company which is diversified globally in order to maximize the probability of a high yield. Understanding the markets and key areas of investment is therefore critical to anyone looking to expand his or her portfolio through such investments.
The LNG market
The LNG market is dominated by the East, and while there are markets within the United States, investors should seek out other markets such as Asia and China which have a further reach within the market. The top markets to consider would be:
Korea Gas Corporation (KOGAS)
The Tokyo Electric Power Company Inc. (TEPCO)
Enagass S.A (PINX:ENGGF)
Chubu Electric Power Co. (CHUEF)
Sonatrach (a private company)
Royal Dutch Shell Pic (RDS/A)
Osaka Gas Company (JP:9532)
Qatar Petroleum (a private company)
Petroliam Nasional Berhad (a private company)
Tokyo Gas Co (TKGSY)
Cheniere Energy (LNG)
Current status of the market
Markets are currently seeing a small decline in investors in 2015. However, the overall 5 years stock analysis of the companies listed above shows a steady incline in LNG prices. Oil and Energy investor predicts that Natural gas Prices will rise through 2016. In a report released by Forbes on America’s involvement in LNG investments, it was stated that “by 2020 we’ll be a net exporter of natural gas. We will, over the next couple of decades, have the capacity to be energy independent for the first time”
It should be noted that the market for LNG tends to follow the trends of traditional oil and gas markets. As the price of the barrels goes up, the price of the LNG tends to follow. Where we are talking about liquid gas, it appears that the market will continue to merge physical barreled gas and LNG investment prices close together.
Where should you put your focus for LNG investments?
Obviously, the American investments in LNG and Oil and Gas in general have been very tarnished by the BP incident. And while this event occurred years ago, the global community is not quick to forget and hold financially responsible (as can be seen in the overall stock reflections). Asia and China markets have shown the best areas of investment with Cheniere Energy having profit reports of 2.6 billion dollars. (LNG) is also ideal for investment as the company is diversified globally and has tangents which do not revolve just around the oil and gas. This means that your investment in the company is (in theory) carried on by the other areas of the company in times when the LNG market is down.
LNG investors should keep away from India as well as Saudi Arabian investors at this time. Where India has shown great developments in their productivity and technology advancements in the past few years, their market for LNG is not developed enough to constitute a substantial investment. If investments with a LNG in India is to be considered, take into account your ROI or invest in a P2B investment. Saudi Arabian markets should be access through other LNG investors such as TKGSY. As the market fluctuates greatly (primarily due to political tensions) it would be unwise to put you primary investment in that sector.
The main benefit from LNG investments
As the world moves closer to new renewable and less wasteful means of consumption, new methodologies in which to use natural gas are being explored. Because natural gas is already a stock option, the implications and the probability of an increase in the investment is great. Legislation has already been passed in several executive orders urging companies and major industries to switch over to LNG and better fuel emission facilities.
An Investor would be wise to diversify their portfolio to include some form of a LNG investment, especially if that person already has interests in Oil and non-liquid gas. New buyers may find that the market is ideal for initial investments as the stock prices are lower than they have been in the recent months. This should not be an indicator that the market is failing; rather one should consider the weather change and the demand for the resource and see it as an opportunity to buy low, wait on the investment and sell high. Keep in mind that any investment is a risk on your finances and you are encouraged to seek the professional opinion of your legal financial advisor prior to making any investments.