In this article, we will discuss the 10 Best LNG and LNG Shipping Stocks to Buy According to Analysts.
The global market for Liquefied Natural Gas (LNG), with the support of secure energy and industrial demand, is looking at continued expansion. The industry is forecasted to grow from $143.35 billion in 2024 to $155.85 billion in 2025, according to The Business Research Company. This reflects a Compound Annual Growth Rate (CAGR) of 8.7%. Looking further ahead, it is expected that the LNG market will reach $205.95 billion by 2029, exhibiting a CAGR of 7.2%, which is predominantly attributed to the global demand for cleaner energy. The demand for LNG is majorly fulfilled by the U.S., exporting around 88.3 million metric tons (MT), which is up by 4.5% from 2023, according to LSEG.
In contrast, the global market also has a major impact from Europe’s LNG demand. The region’s demand accounted for 55% of total LNG exports by the U.S. in 2024, according to LSEG. LNG shipments of 5.84 MT were sent to Europe by the U.S. in December 2024, which is up from 5.09 MT in the previous month.
This increased demand is driven by strong winters as well as supply-related issues from Russia. Previously, Europe imported LNG through Ukraine in 2024, while it is currently seeing increasing geopolitical issues. On the other hand, Asia’s LNG demand has also seen growth, making up 34% of the total LNG exports made by the U.S. in 2024. Accordingly, shipments to Asia rose to 2.01 MT in December from 1.64 MT in November (up by 24%).
However, the industry is currently facing challenges in the form of the U.S.-China trade war, under which China imposed a 15% tariff on the U.S. LNG, as U.S. President Donald Trump put a 10% charge on Chinese imports. While long-term commitments are significant, in 2024, China’s imports made up for only 5.5% (4.3 MT) of the total exports by the U.S., as per Kpler. It has been reported by Reuters that under 20-year agreements, Chinese buyers are to import 20 million tons per annum (MTPA) of LNG from U.S. terminals. However, ongoing issues may curb further contracts.
Thus, for short-term ease, the U.S. may rely on Europe’s demand, however, IEA predicts that the European gas demand will decline from 507 billion cubic meters (bcm) in 2023 to somewhere between 281 and 407 bcm by 2035, owing to its transition to renewable energy sources. On the other hand, China’s LNG demand is expected to grow and reach between 397 and 522 bcm by 2035.
Moreover, advancements in technology in liquefaction and regasification have helped in improving energy efficiency and in reducing methane emissions across the supply chain. Furthermore, offshore gas extraction has been enabled by floating LNG (FLNG) with minimal onshore infrastructure, which adds to flexibility in production. The global LNG liquefaction capacity by 2028 is expected to increase from 473 million tons per annum (MTPA) in 2023 to 968 MTPA by 2028 with the help of new projects as per BusinessWire. The expansion will be led by North America, making up for 54% of the total capacity increase.
Looking on to the other side, Australia also makes up for a key LNG player with over $126 billion invested in new and upcoming projects, as reported by Deloitte. These investments look to increase production capacity and help Australia secure long-term contracts amidst changing global demand.
Despite these developments, natural gas futures prices have increased by around 98.02% in the past six months. This is an increase from $1.956 on August 26, 2024 to $4.23, as of writing this article. This reflects on the high volatility of the market as well as evolving trade flows.
With this, let’s now look at the 10 Best LNG and LNG Shipping Stocks to Buy According to Analysts, focusing on companies that are driving growth in this evolving sector.
Methodology
To curate our list of the 10 Best LNG and LNG Shipping Stocks to Buy According to Analysts, we picked the top LNG companies having an exposure to LNG production and distribution. Furthermore, we made sure that we picked companies with strong market capitalization. Additionally, we looked into the number of hedge funds having a stake in the respective stocks, and made sure the hedge fund sentiment was positively strong for the respective stocks. Finally, we ranked the stocks based on the upside potential predicted by a healthy number of analysts, as of writing this article.
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10. BP p.l.c. (NYSE:BP)
Average Upside Potential: 9.08%
Number of Hedge Fund Holders: 44
BP p.l.c. (NYSE:BP) is a multinational energy company with major operations in oil and gas production, refining, and low-carbon energy related solutions. The company generates revenues through Gas & Low Carbon Energy, Customers & Products, and Oil Production & Operations, with a focus on improving efficiency and disciplined capital allocation.
BP p.l.c. (NYSE:BP) reported an underlying replacement cost (RC) profit of $1.2 billion in Q4 ended December 31, 2024, which is a decrease from $2.3 billion in Q3. This decline is a reflection of lower refining margins, higher turnaround costs, and lower fuels margin due to seasonality.
However, the company reported strong cash flow of $7.4 billion, with support from $1.3 billion of working capital release. Its net debt also reduced and stood at $23 billion, supported by $2.8 billion of divestment proceeds and strategic debt management. As a result, BP p.l.c. (NYSE:BP) announced an $0.08 dividend per share, and completed a share buyback at $1.75 billion. Looking ahead, the company plans to repurchase an additional $1.75 billion before Q1 2025 results are out.
Regardless of varied performance by BP, the company approved 10 new Final Investment Decisions (FIDs) and expanded into the markets of Iraq and India, emanating strategic progress. The company also reported plant reliability above 95%, which supports its upstream operations.
On January 2, 2025, BP p.l.c. (NYSE:BP) announced the start of gas supply from wells at the GTA Phase 1 Liquefied Natural Gas (LNG) project to its floating production storage and offloading (FPSO) vessel for the next stage of commissioning. The project is key to BP’s LNG expansion efforts, as it is expected to produce around 2.3 million tons of LNG per annum.
Thus, BP’s strategy through this new investment supports its growth target of 25 million tons per annum (MTPA) by 2025. Supplemented by strong cash generation and a stable balance sheet, BP looks to strengthen its financial position as it navigates through industry challenges to position itself as one of the best LNG stocks to buy right now.
9. Kinder Morgan, Inc. (NYSE:KMI)
Average Upside Potential: 10.36%
Number of Hedge Fund Holders: 55
Kinder Morgan, Inc. (NYSE:KMI) is one of the leading energy infrastructure companies located in North America. The company specializes in the transportation and storage of natural gas, refined petroleum products, crude oil and CO₂. Kinder Morgan owns key assets around major LNG hubs, and facilitates the supply of natural gas from its production regions to liquefaction facilities, proving to be a major player in supplementing the demand for U.S. LNG exports.
The company has shown strong financials for Q4 2024, with its net income increasing to $667 million, up from $594 million when compared to Q4 2023 (12.3%). Kinder Morgan, Inc. (NYSE: KMI) has also shown a distributable cash flow (DCF) of $1.26 billion, which means that they have stable cash flow to support shareholder returns and capital investments.
The company has been expanding its infrastructure portfolio, with advancements in major projects including the $1.7 billion Trident Intrastate Pipeline and the $1.6 billion Mississippi Crossing Project, to compensate for increasing LNG demand. The company secured long-term contracts for its $3 billion South System Expansion 4 (SSE4) project, which strengthens its position in the energy market. Kinder Morgan, Inc. (NYSE:KMI)’s backlog of projects increased by 60% to $8.1 billion, which is driven by natural gas infrastructure.
With new investments, including the 216-mile pipeline build, the company looks to produce 1.5 billion cubic feet per day (Bcf/d) of capacity from Katy, Texas, for the LNG and industrial corridor near Port Arthur, Texas. The investments are supposed to generate an adjusted EBITDA for 2025, approximately 8 times on a full-year basis, excluding $20 million in adjusted EBITDA, adding to the confidence of its shareholders.
Thus, Kinder Morgan, Inc. (NYSE:KMI)’s strong financial health and strong growth prospects have led to a 59.55% stock return over the past year, as of writing this article, which outperformed the broader market’s return of 20.70% for Q4 2024, allowing it to make it to our list of the 10 Best LNG and LNG Shipping Stocks to Buy According to Analysts.
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