Australia is the world’s leading exporter of Liquefied Natural Gas (LNG). Accounting for approximately 20% of global LNG exports. In 2021, Australia exported 4,314 petajoules of gas enough to power up 83 million homes for a year.
In 2021, Australia earned $48 billion AUD for its gas exports. For 2022, exports are forecasted to be a record $84 billion AUD.
One of the key drivers for the increase in LNG earnings has been the increase in the spot price of LNG. 2022 has seen LNG prices surge as much as 150% since the start of the year.
As power plants phase out coal, gas is becoming more important to keep the lights on. Furthermore, with the war in Ukraine, LNG is sought after from Europe as Russian gas and oil is subject to sanctions. Also, there continues to be a strong demand from Asia for Australian LNG.
Who are the key corporate players in LNG and are there investment opportunities in these stocks?
We have created a new WatchList under the Commodities Group (found per the Viewers tab under WatchList Viewer). The new WatchList is named: LNG. This new WatchList houses 4 key LNG stocks – WDS.AX, STO.AX, VEA.AX and ORG.AX.
As of 8 November 2022, WDS.AX is the top rated VST stock in this list (see the Essay on 26 August 2022 for more on WDS.AX).
Since 4 January 2022 through to 8 November 2022, the 4 stocks in the WatchList have produced some impressive results collectively and returned over 27%. The best performer has been WDS.AX up over 70% followed by VEA.AX which is up over 17% and STO.AX which is up over 14%.
If supply shortages continue to persist, then LNG export prices are most certainly going to hold if not increase. Competition for LNG is fierce, countries are desperate to keep their generators firing to meet energy requirements.
New entrants into this space can take several years before they are able to export LNG. Until supply increases or demand decreases, shortages and high prices will most certainly prevail and, in turn, drive key LNG stocks higher.
You now have 4 key LNG stocks at your fingertips and can add to this list. Are there any further key LNG stocks to add? Let us know by emailing us.
Please CLICK HERE to see the weekly video where we take a closer look at the 4 key LNG stocks.
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