Liquefied Natural Gas. It is most commonly known as LNG. It has the potential to be one of Australia's major exports in the next twenty years. As we draw towards the end of 2008 we are starting to prepare the ground for what we will serve up to our subscribers of the Australian Small Cap investigator (ASI) in 2009.
And we've found just the thing.
Everyone has heard the oil story. Everyone knows about iron ore. But who has seen the LNG story? Almost no-one. In fact, the reason so few people know about LNG is that nobody has bothered telling the story. Or if they have not many people have listened.
After doing a lot of research for the recent edition of ASI we have come to the conclusion there will be an increase in demand and an increase in supply for at least one commodity - LNG.
LNG is produced by liquefying natural gas and then sending it on a ship in liquid form to a regasification plant in Japan or the United States where it is converted back into a gas and then distributed to homes and businesses. The reason it is converted into a liquid is due to space. LNG it uses just 1/600th of the space of natural gas.
The reason we are getting onboard with LNG in 2009 is due to the abundance of it in Australia. Yet currently, Australia is producing natural gas and LNG at a fraction of the full potential. You only have to look at the developments taking place off the coast of Western Australia and in Queensland to get an idea at the potential size of this industry.
Also consider two of the major stories in the resources industry during the last few months. BG Group's $6 billion takeover bid for Queensland Gas, and Origin Energy's joint venture with US energy giant ConocoPhillips.
In 2009 the LNG story looks set to be the next market ready to boom.
Kris Sayce
for The Daily Reckoning Australia
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About the Author
Kris Sayce began his financial career in the City of London as a broker specializing in small cap stocks listed on London's Alternative Investment Market (AIM). At one of Australia's leading wealth management firms, Kris was a fully accredited adviser in Shares, Options and Warrants, and Foreign Exchange. Kris was instrumental in helping to establish the Australian version of the Daily Reckoning e-newsletter in 2005. In late 2006, he joined the Melbourne team of the leading CFD provider in Australia.
