For shareholders in Liquefied Natural Gas Ltd (ASX: LNG), 2014 will be a year they never forget…
Source: Yahoo Finance.
After all, it's not every year your holding in a stock rises more than 700%, despite the company posting bigger losses than ever before.
Whilst 2015 is unlikely to be as impressive as 2014, with shares already up 32%, it could be another great year for investors convinced LNG Ltd has a sound growth strategy.
Who is LNG Ltd?
LNG Ltd has three projects spread throughout the world: Fisherman's landing in Queensland; Magnolia LNG in Louisiana, USA; and Bear Head LNG in Nova Scotia, Canada.
All of these fully owned subsidiaries have proposed sites for liquefied natural gas (the commodity, not the company) liquefaction export facilities.
Put simply, their facilities will link to gas fields via pipeline, turn the gas into liquid and load it onto ships for transport to foreign countries where energy prices are much higher.
Fisherman's Landing in the port of Gladstone was the company's flagship project for many years until its gas proposed supplier, Arrow Energy, was acquired in 2010. The project is now idle.
Magnolia LNG is a proposed eight million tonnes per annum (8mpta) facility which has big potential given its geographical location. Strong progression toward financial close (which is due by mid-2015) is the catalyst for the company's share price rise.
The partially completed Bear Head LNG project was only recently acquired by LNG Ltd but has already moved through a vast number of regulatory hurdles. This is also an 8mpta facility.
Both Magnolia LNG and Bear Head LNG are seeking export approval to non-FTA (Free Trade Agreement) countries (particularly those in Asia, where prices are high) from the U.S. government.
Should you buy LNG Ltd shares?
LNG Ltd is a high-risk/high-reward investment. If it can get binding tolling agreements from gas suppliers (remember commodity prices have fallen heavily in recent times) and the approval to export to non-FTA countries, its share price will likely be considerably higher than where it is today. However, there's a lot that can go wrong.
Indeed 2015 could go both ways for LNG Ltd shareholders.
