Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Cheniere Energy, Inc. (LNG), Anadarko Petroleum Corporation (APC), And Three Ways to Ride the LNG Fired Rocket

A Deeper Look At China’s Commodity IndustryThanks to the shale gas boom in North America, natural gas has hovered around $3.50 per MMBtu over the last year. But Asian and European nations haven’t been that lucky with the production bonanza, which is why natural gas costs 3-4 times more in these regions than in North America. This pricing differential presents an bullish case for at least three different industries, and here are a few handpicked companies that seem poised for a tremendous upside.

LNG exports

Cheniere Energy, Inc. (NYSEMKT:LNG) has almost become synonymous with LNG exports from the U.S. The company received the first approval to setup an LNG export terminal over the last 50 years, and Cheniere Energy, Inc. (NYSEMKT:LNG) was quick to take advantage of the opportunity. It is currently expanding its Sabine Pass terminal, which is expected to be operational by 2017. But, the company is already enjoying a near monopoly in the industry.

It has already secured willing buyers from the Middle East, which are ready to import LNG as soon as the development work is complete. Talking about its existing exports, the U.S. government recently made an exception by allowing LNG exports to India. Normally, the U.S allows exports to countries that have signed the Free Trade Agreement, but the recent permission to export 3.5 million tonnes of LNG per annum could be the start of a greater and deeper relationship with India.


Anadarko Petroleum Corporation (NYSE:APC) has been generally known as an oil E&P company, but it has shifted its focus to natural gas lately. In 2010, Anadarko Petroleum Corporation (NYSE:APC) and Eni jointly discovered the world’s second largest natural gas reserves in Mozambique, Africa, with reserves of over 150 trillion cubic feet of natural gas. Being geographically closer to Asia, Anadarko Petroleum Corporation (NYSE:APC) would not only save transportation costs, but would also incur fewer risks involved in overseas transportation.

But, the development costs of the project are estimated to be around $50 billion, with absolutely no returns on investment until 2018. Since Anadarko Petroleum Corporation (NYSE:APC) has cash and cash equivalents of $2.47 billion and generated $1.75 billion in free cash flows last year, it isn’t financially capable to undertake such high risks. As a result, Anadarko Petroleum Corporation (NYSE:APC) is in talks with Exxon Mobil Corporation (NYSE:XOM) and Royal Dutch Shell to sell 10% of its stake for around $2.5 billion.

But that doesn’t take away all its potential rewards. The company is in talks with 20 willing buyers of LNG in 10 different nations, and it’s quite possible that it would secure long term contracts by the end of this year. With willing buyers and blockbuster proven reserves, it’s only a matter of time before Anadarko Petroleum Corporation (NYSE:APC) starts getting the massive influx of cash from LNG exports.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.