This January marks a milestone in liquefied natural gas — for the first time, cheap natural gas from U.S. shale plays will be exported.
Unfortunately, the event can be a double-edged sword for investors, considering both the sheer amount of natural gas that can be potentially added to the global LNG market, as well the slowing demand from Japan and South Korea, can cause prices to drop significantly.
Cheniere Energy (NYSEMKT:LNG) is expecting to start a new production train every six months until 2019, which amounts to seven lines of gas qualification at their plants in Cameron Parish, LA and Corpus Christi, TX. Of course, those lines will make up most of the LNG production in the US.
Cheniere has already sold its LNG via long-term contracts, though a smaller amount remains for sale in smaller market areas.
The first natural gas supplies should arrive at the LNG plant later this year.
I know what you’re thinking: why invest when we’re expecting a decrease in demand?
Chenire’s CEO, Charif Souki, recently reiterated his confidence that the market will return, saying, “You don’t make a decision based on what’s happening in the next six months. You make a decision based on what you think is going to happen over the next 20 years.”
We couldn’t agree more.
Although shares of the stock have fallen by roughly 50% since peaking last year, you have to wonder if we’re staring at solid buying opportunity.
Personally, I think we are. In fact, I’ve on the verge of releasing a brand new investment report on Thursday morning to Energy & Capital readers that will highlight one strong long-term investment in the LNG sector.
Naturally, this sort of investment horizon gives the market plenty of time to rebound.
You see, the price volatility not only is bringing more competition for piece a market, but LNG remains one of the best long-term investments in the global energy sector.
Again, only members of the Energy & Capital community will have first access to my new investment report, and if you’re not a part of it yet, you can easily sign up — absolutely free — by adding your email to the box below.
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Until next time,
A true insider in the technology and energy markets, Keith’s research has helped everyday investors capitalize from the rapid adoption of new technology trends and energy transitions. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital, as well as the investment director of Angel Publishing’s Energy Investor and Technology and Opportunity.
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