AFR Today
Ref: http://www.afrsmartinvestor.com.au/p/shares/br_mining_players_worth_watching_myi0Gp2HugBCDtmpjUObVI Liquefied Natural Gas Liquefied Natural Gas was the best performing S&P/ASX 200 energy stock in 2014 with its share price increasing from 29¢ at the start of the year to $4.45 by September, It closed the year at $2.40, still a gain of more than 700 per cent.
In contrast to most players in the sector, LNG’s success hasn’t been built around huge oil discoveries or the construction of massive pipelines, and arguably this should stand it in good stead, regardless of near-term gyrations in energy prices.
LNG’s patented Optimised Single Mixed Refrigerant LNG process technology (OSMR) and modular construction method, which should reduce project capital expenditure and ongoing operating costs significantly, will be deployed at its Magnolia (US) and Bear Head (Canada) LNG projects. The company is also negotiating gas supply for a project at Gladstone in Queensland.
Its flagship Magnolia project, where binding offtake negotiations are well advanced, is expected to achieve financial close in 2015 and first production in 2018. Production at Bear Head is anticipated in 2019.
Martin Carolan from Foster Stockbroking says the announcement of the first binding tolling agreement will significantly de-risk the entire project and should see investors bid the share price higher. He has a buy recommendation on the stock and recently increased the price target from $5.20 to $7.00 after LNG was notified by Meridian Gas that it is ready to progress a binding 20-year tolling agreement.
GO LNG!
LNG Price at posting:
$4.65 Sentiment: Buy Disclosure: Held
