The Liquified Natural Gas Game Has Changed… It’s Time to Jump on the LNG Powered Rocket via /r/wallstreetbets #stocks #wallstreetbets #investing


The Liquified Natural Gas Game Has Changed… It’s Time to Jump on the LNG Powered Rocket

Ladies, gentlemen, and most importantly…degenerates,

Pre-cursor: For those who have followed me or my posts know that I began opining on the upside of MRO in September… was called an idiot, pumper-dumper, and a bunch of other colorful things. Since then, MRO has more than doubled with plenty of runway ahead. With That Said…I consider the recent paradigm shift in the LNG industry to be equally as important and lucrative to the one that just happened in the oil industry.

Before I begin my thesis on how the LNG shipping industry game has changed…Forever, let’s check in on Steam Boat Willy, chugging along on his his LNG Steamer to Europe…

https://i.redd.it/xmvrz64s8rq81.gif

Liquified Natural Gas – The Game Has Changed:

Support Article 1: Germany girds for gas rationing, Europe on edge in Russian standoff

Link: https://www.reuters.com/business/energy/germany-declares-early-warning-potential-gas-supply-disruptions-2022-03-30/

Support Article 2: Putin Says Gas Exports to Be Halted If Payments Not Made in Rubles

Link: https://www.bloomberg.com/news/articles/2022-03-31/putin-says-gas-exports-to-be-halted-if-ruble-payments-not-made?srnd=premium

Support VideoPanel Interview from 3/29/2022 with CEOs of GasLog Partners (GLOP), Golar LNG (GLNG), FLEX LNG (FLNG)

Link: https://www.youtube.com/watch?v=isWeT6lK59o&t=931s

Summary of why the game has changed:

  • If/When there’s a cease-fire/”Peace,” Europe is NEVER going back to relying solely on Russia for Natural Gas.
    • Read the statement above one more time and let it sink in. Yes, Russian natural gas is cheaper and Europe will need to buy it during the transition to LNG. But they will be doing everything that they can to sure up Natural Gas supply from elsewhere.
    • See 19:40 in the support video: Per CEO of Golar LNG CEO’s meeting with the Vice Chancellor of Germany, “Irrespective of the outcome of the current Russian/Ukraine situation, Germany has now taken a strategic decision to diversify it’s Natural Gas sources… whatever the outcome, they cannot be as dependent on one single source for gas… so for us, the LNG market was already tight before this situation, has now seen a massive demand pull.”
      • That is directly from the German Horses mouth. Germany is Europe’s largest consumer of Natural Gas. It would be highly unlikely that the rest of the European Union will not follow suit.
  • Supply and Demand – Prices are going to stay higher for longer (years, not months)
    • As noted above, the world is currently experiencing a huge BOOM in demand from Europe
      • The LNG demand from Asia isn’t going anywhere, but Europe is willing to pay more to secure supply
      • The supply for LNG Ships is fixed, the earliest delivery date for a new LNG Carrier is 2025 (per GLOP Q4 Investor Earnings Presentation)

GLOP

GasLog Partners (GLOP) is a great play because it’s heavily undervalued with a strong (and improving) balance sheet. I consider it to be very cheap right now, especially given that the market hasn’t fully recognized and bought into the LNG Paradigm Shift. I see no reason why this stock can’t AT LEAST double in the coming months. See Table Below for high level breakdown:

GLOP Fundamental Analysis

GLNG

  • Is uniquely positioned with a fleet of modern Floating Liquid Natural Gas Vessels that can serve as floating LNG hubs…anywhere in the world. Their business model is set up literally perfectly to capitalize on the current Global LNG market. See the illustration below on their restructuring (taken from GLNG’s Q4 earnings investor presentation).

GLNG restructuring is ideal for the current global LNG market conditions.

GLNG is going to make a killing with the elevated Nat. Gas Prices

In Conclusion, I find that both of these companies are in excellent position to capitalize on the LNG Boom for different but equally compelling reasons.

Position/Disclaimer: I am long on both GLOP and GLNG in a straight trade. Feel free to jump on the LNG Powered Rockets with me. Cheers and Happy Trading.