Hi Paul -
I have been studying the emerging companies in the E&P, storage & distribution, infrastructure development all relating to NG (and LNG) from the Marcellus (and surrounding area) NG Shale deposits to the major Ports for distribution.
(From LNG Facts: aessparrowspointlng.com )
History of the U.S. LNG ports.
# Four marine receiving terminals were built in the United States between 1971-1980 -Lake Charles Louisiana, Everett, Massachusetts, Elba Island Georgia and Cove Point, Maryland
# As production techniques improved in North America, Elba Island and Cove Point receiving terminals were mothballed in 1980. The Cove Point facility continued to operate as a "peakshaving" facility that was used in periods of high natural gas demand.
# First exports of LNG from U.S. to Asia in 1969 when Alaskan LNG sent to Japan.
# The LNG market in both Europe and Asia continued to grow rapidly from that point forward.
# In 1999, first Atlantic Basin LNG liquefaction plant in the western hemisphere began production in Trinidad.
# Growing demand for natural gas in the U.S., particularly for power generation, results in renewed interest in LNG in U.S.
# The two mothballed LNG receiving terminals are reactivated - Elba Island, 2001; Cove Point 2003. The Cove Point facility is in the process of expansion.
Map of LNG pipeline U.S.
Major Natural Gas Shale Basins In The United States
I believe that the AES Sparrow Point LNG Terminal now under expansion will really benefit from the increased volume of NG from all of the new wells drilled.
Companies that I have identified so far that should benefit from the increased U.S. NG activity include: (1) AES CORPORATION (NYSE: AES), (2) CHGO BRIDGE & IRON (NYSE: CBI) and (3) WILLBROS GRP INC DE (NYSE: WG).
finance.yahoo.com
Unfortunately none really provide a good "value" bet except for perhaps CHGO BRIDGE & IRON (http://www.cbi.com/about/history.aspx ) (NYSE: CBI) since it's PE is around 10.5. However, the analysts see next year's earnings not growing as much and have their forward PE at around 12. The company is similar in size to SHAW and 1/5 the size of FLR. Neither SHAW or FLR provide pure plays in the LNG terminal design and construction business.
AES (http://www.aes.com/aes/index?page=global_presence ) has a lot of projects in the hopper (in particular the Sparrow Point LNG Terminal & 84 mile connecting pipeline) but are burdened w/ a lot of debt and potential delays in their LNG terminal. Analysts do show their forward PE around 11 but they stopped paying a dividend in 1993 and split their stock several times ('94,-97,&'00). Maybe now in 2010 revenues have caught up with their huge number of shares (668M shares) and it might just be a good time to test the waters.
There are a lot of small NG "collectors" in this area that I am still researching. Many are MLP and LLP but could also be candidates for consolidation by larger companies (ie. like WMB).
EKS
P.S. I did see that StealthGas, Inc. (GASS) has a fleet of 39 LPG vessels (some were recently sold to Chinese buyers) which according to the AES Sparrows LNG article represented 39 vessels/140 vessels world wide 28% of the world's fleet (at least at the time the article was written). So GASS is the major pure play in the LPG ocean transportation.
I did discover that NOBLE GROUP LTD (NOBGF.PK) has a Fleet management shipping subsidiary (http://www.fleetship.com/profile/index.html ). Essentially companies w/ vessels outsource the management to Fleet. They are known for their top notch expert crews (many from India). I expect the Nobel Group to get into LPG distribution in a big way in the future.
In late 2009 the China sovereign wealth fund China Investment Corporation, Inc. (CIC) made investments in BOTH AES and NOBEL Group in excess of $1Billion each.
EKS |
