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LNG stocks to watch

Thiveyen Kathirrasan
Thiveyen Kathirrasan9/10/2018 07:30 AM GMT+08  • 12 min read
LNG stocks to watch
SINGAPORE (Sept  10): In our article titled “Gas production is being transformed by disruptive technology led by Petronas Gas and Shell” (Issue 846, Sept 3), we looked at the liquefied natural gas industry. LNG is a bridging energy source between non
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SINGAPORE (Sept 10): In our article titled “Gas production is being transformed by disruptive technology led by Petronas Gas and Shell” (Issue 846, Sept 3), we looked at the liquefied natural gas industry. LNG is a bridging energy source between non-renewables and renewables; the prospects over the long term could be of concern, as it is only an interim energy source. The switchover to clean, renewable energy is a looming risk for the LNG and fossil fuel energy industry as a whole. Furthermore, the returns on investment on an exhaustible resource and erratic price movements of crude oil prices (since LNG prices are mostly pegged to oil) are general risks that investors have to be cognisant of.

Still, global gas demand is projected to rise, particularly for LNG, into the 2030s, driven by demand growth from China. The increased usage of floating liquefied natural gas technology is expected to liberalise the market by establishing a global gas price, which is currently pegged to oil prices. The shift from lengthy and costly subsea pipelines to floating liquefaction and regasification terminals will lessen the costs and time to construct infrastructure while allowing for smaller and remote fields to be explored with floating LNG technology.

The most important players in the LNG sector are Gazprom PJSC, Golar LNG, Cheniere Energy, Petronas Gas and, eventually, Singapore companies such as Sembcorp Marine.

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