In this article, we will discuss the best LNG stocks to buy in 2025.
Liquefied natural gas (LNG) is natural gas that has been reduced to a liquid state through a process of cooling, making it easier, safer, and more efficient to store and ship around the world. The global LNG trade has skyrocketed over the last few years and reached 404 million metric tons in 2023, with demand to rise by another 50% by 2040.
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The United States of America is the largest LNG exporter in the world, with 88.3 million tons shipped in 2024, up 4.5% from the previous year. Europe remains the top destination for American LNG, which has replaced nearly half of the Russian gas supply to the continent after the outbreak of war in Ukraine. Although last year was marked by slow growth, these numbers are expected to receive a significant 15% boost in 2025 due to several new projects coming online, notably the Plaquemines LNG and Corpus Christi LNG Stage 3 projects. These expansions could pay big dividends for the country’s LNG-focused companies, given the demand grows as predicted and prices stay attractive. On their current trajectory, the ballooning LNG exports would support nearly half a million domestic jobs annually and contribute $1.3 trillion to US GDP through 2040 while having a negligible impact on domestic gas prices, according to figures from S&P Global.
Another point to note is that the United States is now capable of exporting LNG at such historic levels without impacting supplies to its own people. The US natural gas output stands near an all-time high and nearly 90% of it remains available for domestic consumption. At the same time, natural gas prices for American households continue to be among the lowest in the world.
The American LNG sector is expected to receive a significant boost after President Donald Trump issued an order last month for the country to resume processing export permit applications for new LNG projects, reversing a pause on permits for new projects that former President Joe Biden put in place early last year to study the environmental and economic effects of the booming export industry. Several key LNG importers from Asia have hailed the move as a necessary step for maintaining their energy security and decarbonizing their energy systems in the long run. Even just a few days ago, after a round of talks with Japanese Prime Minister Shigeru Ishiba, President Trump announced that Japan will soon begin importing a record amount of new shipments of American LNG.
Paul Everingham, CEO of Asia Natural Gas and Energy Association (ANGEA), stated the following after the resumption of LNG export approvals in the United States:
“A recent study by Wood Mackenzie, commissioned by ANGEA, found that Asia’s LNG demand would nearly double between now and 2050, driven largely by significant growth in demand from South and Southeast Asia. The study also forecast that the United States would make up a third of global LNG supply by 2035. However, both LNG demand growth from emerging Asia and the ability of the US to meet it, were contingent on the ‘pause’ being lifted and sufficient US supply being available in coming decades to moderate global prices and ensure that LNG was affordable for nations in South and Southeast Asia. Today’s issuing by President Trump of an order to resume processing of LNG export approvals will enable key projects to proceed and give decision and policy makers in Asia the certainty they require to make long-term decisions about energy. Emerging economies in Asia seek to switch out high-emitting coal use for more gas-fired power as they pursue sensible and well-planned growth in renewable energy sources. The resumption of LNG export approvals in the US will help make this a reality.”
That said, a recent headwind for the American LNG industry has emerged in the form of a burgeoning trade war between the US and China, with American gas exporters caught in the crossfire. China, the largest LNG importer in the world as well as the fastest-growing LNG market globally, was seen as a key growth market for American LNG until President Trump slapped an additional 10% tariff on all Chinese imports earlier this month. This move was followed by Beijing announcing its own retaliatory tariffs on imports from the US, including a 15% tariff on American LNG. Though the two countries are not highly dependent on each other in the LNG arena, with China accounting for only 5% of US LNG exports last year, these numbers are not expected to surge anytime soon if the current political landscape remains the same.
A possible solution could be directing even more liquified natural gas to Europe, especially after buyers there look to replenish depleted inventories following a relatively cold winter, but that is also a short-term fix. The continent’s appetite for gas is expected to decline over the long term, given its strong commitments to reduce carbon emissions by shifting to renewables.
With that said, here are the Best LNG Stocks to Buy in 2025.
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Methodology:
To collect data for this article, we scanned Insider Monkey’s database of 900 hedge funds and picked the top 10 companies operating in the liquified natural gas sector with the highest number of hedge fund investors in Q3 of 2024. Following are the Best LNG Stocks to Buy According to Hedge Funds.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10. Energy Transfer LP (NYSE:ET)
Number of Hedge Fund Holders: 29
Energy Transfer LP (NYSE:ET) is one of the largest and most diversified midstream energy companies in North America, with a strategic footprint in all of the major US production basins. The company announced in December 2024 that its subsidiary, Energy Transfer LNG Export, has entered into a 20-year LNG sale and purchase agreement with Chevron related to its Lake Charles LNG project. Under the agreement, the company will supply 2 million tons per year of LNG to Chevron.
Energy Transfer LP (NYSE:ET) had a strong Q3 2024 as natural gas liquids and crude transportation volumes hit a company record. The company’s exported crude volumes surged by 49% YoY, while crude transportation volumes were also up 25%. As a result, ET reported a net income of $1.18 billion in Q3, against $584 million in the third quarter of 2023. The company announced a quarterly dividend of $0.325 per share in January, up 0.8% from the prior dividend of $0.323, marking the 13th consecutive quarterly dividend increase.
In recent news, it was announced that Energy Transfer LP (NYSE:ET) has entered into a long-term natural gas supply agreement with CloudBurst Data Centers for its development in Central Texas. Under the agreement, the energy company will provide up to 450,000 million British thermal units per day of firm natural gas directly to the data center, bypassing existing transmission grids. The agreement marks ET’s first commercial arrangement to supply natural gas directly to a data center.
Patient Capital Management stated the following regarding Energy Transfer LP (NYSE:ET) in its Q3 2024 investor letter:
“Energy names disappointed in the quarter following commodity prices lower throughout the period. We took the opportunity to add to our highest conviction ideas. We look to names that have idiosyncratic opportunities and are attractive in a variety of different commodity price environments. Many see risk to energy prices over the next year as supply is expected to outstrip demand by 1.3mb/d even before assuming any incremental OPEC supply comes onto the market. With commodities, consensus is rarely right. We assess companies on through cycle returns and normalized prices. From this perspective, we see a handful of attractive opportunities, including Energy Transfer LP (NYSE:ET), Seadrill, and Kosmos.
Our ownership of Energy Transfer began in 2019 with the belief that the limited supply of new pipelines would provide attractive pricing opportunities over the long-term. At the same time, the company was paying us an attractive dividend (10% yield over the period). So far this investment thesis has largely played out, but we continue to see an attractive long-term setup for the name given our belief that natural gas will be a key ingredient to bridge us to a net carbon neutral world.”
9. BP p.l.c. (NYSE:BP)
Number of Hedge Fund Holders: 36
BP p.l.c. (NYSE:BP) is a British multinational company recognized worldwide for quality gasoline, transport fuels, chemicals, and alternative sources of energy such as wind and biofuels. The company is also a recognized global LNG player with established and significant LNG marketing and trading capabilities across the world.
BP p.l.c. (NYSE:BP)’s profits slumped by 30% to $2.3 billion in Q3 2024 amid weaker refining margins and oil trading results. Moreover, a 9% annual rise in the company’s debt levels was also concerning for investors. However, the energy giant remained committed to its shareholders and maintained its quarterly dividend at $0.08 per share after raising it in the previous quarter. BP also decided to keep the rate of its share buyback program at $1.75 billion for the fourth quarter.
BP p.l.c. (NYSE:BP) continues to make progress in the LNG sector and it was announced last month that the company has safely begun flowing gas from Greater Tortue Ahmeyim (GTA) Phase 1, one of the deepest, most complex gas developments in Africa. The 2.3 million tons per annum (mtpa) LNG project is expected to dispatch its first cargo by March.
Shares of BP p.l.c. (NYSE:BP) surged by over 7.4% on February 10, 2025, after an activist investor, Elliott Investment Management, reportedly acquired a meaningful stake in the firm. Moreover, it is speculated that the investor will try to get the company to implement changes in an effort to boost its stock, including recruiting a new chairperson and pressuring the oil giant to sell its environmentally friendly assets.
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