As China and India seek alternatives to coal and Europe turns its back on Russian energy due to the war in Ukraine, liquefied natural gas is becoming a hot commodity globally. According to a report released this week by Stifel Financial, global LNG demand is expected to grow 5% annually through 2034. By 2030, global demand is expected to reach 596 million tonnes, up 47% from 401 million tonnes in 2023. According to the 90-page report, LNG demand has grown five times faster than oil over the past 20 years. Because LNG burns cleaner than coal or crude oil, it is considered a “bridge fuel” between fossil fuels and renewable energy. Stifel recommends Cheniere, Chart Industries and Goler LNG as companies expected to grow as they build LNG infrastructure to meet growing demand. Chart makes plants that cool natural gas to make it liquid and warm it back up to gas after delivery. Georgia-based Charter is expected to see high single-digit to low double-digit annual revenue growth over the next decade by providing “picks and shovels” to build the LNG supply chain, Stifel said. The investment bank has a $199 target price for Charter, which would imply a 71% upside from Tuesday's closing price of $116.48. Charter has fallen about 15% so far this year. Cheniere is a major LNG exporter with a capacity of 45 million tonnes per year, 48% of the U.S. total. The Houston-based company plans to increase its LNG production capacity to 75 million tonnes by 2031. Stifel has a $204 target price for Cheniere, which would imply an 11% upside from Tuesday's closing price of $183.07. Cheniere has risen 7% this year and 15% in the past three months. Golar produces floating LNG facilities, which are essentially a one-stop shop for extracting natural gas, turning it into liquids and offloading it to ships for delivery. The company has two operating facilities in Cameroon and Senegal with a combined production capacity of 5 million tonnes per year. Stifel's price target on Golar is $53 per share, suggesting a 63% upside from Tuesday's closing price of $32.61. Golar shares are up 42% this year, but shares have fallen about 7% this month. GLNG Mountain Golar LNG shares have outperformed the sector and the market in 2024.
