As per U.S. Energy Information Administration (EIA), Global liquefied natural gas (LNG) trade has grown by 10 percent to 38.2 Bcf/d (billion cubic feet per day) worldwide in 2017 primarily due to growing liquefaction capacity in the Australia and the United States. As per the International Association of Liquefied Natural Gas Importers, LNG’s trade is up by 3.5 bcfd from 2016 and is the largest annual volume increase on record. 3.4 bcfd of liquefaction capacity was collectively added due to the new liquefaction export capacity commissioned in Australia, the United States and Russia. The increase in LNG supply was due to the new production from Australia (10.7 mmt) and from the United States (9.6 mmt), along with better performance of existing liquefaction plants in Algeria, Angola and Nigeria (6.2 mmt). Primarily, LNG prices now look favorable and can benefit the below 2 LNG players.
 

Liquefied Natural Gas Ltd

Extended Magnolia LNG EPC Contract: Liquefied Natural Gas Ltd.’s (ASX: LNG) stock climbed up 2.9% on June 18, 2018 after the company extended the validity period of its US$4.354 billion engineering, procurement, and construction (EPC) contract with KSJV, which is a KBR – SKE&C joint venture led by KBR for its 100% owned subsidiary, Magnolia LNG, LLC. The contract is now valid through December 31, 2018. Meanwhile, Magnolia LNG is expected to lead the next generation of U.S. LNG export due to its fully de-risked status. Further, Magnolia LNG is the only U.S. greenfield LNG export development project that is construction-ready, and has already secured equity financing, FERC Notice to Proceed, U.S. Department of Energy non-FTA and FTA export approval, and a LSTK EPC contract. On the other hand, LNG stock has risen 28.4% in six months as on June 15, 2018. As of now, we give a “Buy” recommendation on the stock at the current price of $ 0.535.
 

Magnolia LNG (Source: Company Reports)
 

Woodside Petroleum Limited

Commences Train 2 LNG Production:Woodside Petroleum Limited’s (ASX: WPL) stock has risen 19.70% in three months as on June 15, 2018 and looks to be another beneficiary of the LNG scenario. The market conditions are supporting its long-term strategy while LNG demand growth has been higher with development costs at a low point in the cycle. With Global LNG demand growth expected to be at a higher level, WPL’s fundamentals can help it grow further. The company has recently successfully started Train 2 liquefied natural gas (LNG) production at its onshore facility near Onslow, Western Australia. The commencing of Train 2 reflects the success of the project as part of WPL’s growth strategy and is expected to drive WPL’s targeted production of approximately 100MMboe by 2020. WPL is progressing for Phase 2 of the Julimar-Brunello Project, that is expected to tie-back the Julimar field to the existing Brunello subsea infrastructure which is connected to the Wheatstone offshore platform. The company’s next target is successful commissioning of the domestic gas plant, expected to take place in the second half of 2018, which will add to Western Australia’s strong and secure energy supply. We give a “Hold” recommendation on the stock at the current price of $ 34.

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