Cheniere Energy, Inc.’s (LNG - Free Report) Midship natural gas pipeline in Oklahoma recently received a positive environmental review from the U.S. Federal Energy Regulatory Commission. The company, which intends to complete the project by early 2019, will build and operate a 234-mile pipeline, along with three compressor units, a booster station and other facilities in Oklahoma.
The $1-billion pipeline project is expected to transport 1.44 billion cubic feet of natural gas per day from the STACK/SCOOP plays in Anadarko Basin to existing pipelines near Bennington. The project will cater to the Gulf Coast and southeast markets that are witnessing booming demand for liquefied natural gas.
Apart from Cheniere’s Midship, Enable Midstream Partner’s (ENBL - Free Report) Cana and Stack Expansion Project, along with the Wildcat pipeline, are also likely to buoy the takeaway capacity from the Oklahoma shale plays. EnLink Midstream Partners, LP. (ENLK - Free Report) also owns extensive oil and gas gathering assets in the area, catering to the growing demand.
Reportedly, natural gas output in the United States has surged around 60% in the past 10 years and is set for another 60% growth in the next 20 years. LNG exports are likely to increase to around 10 billion cubic feet per day within five years.
Cheniere Energy is the only LNG exporter in the United States, currently exporting to more than 20 countries and plans to turn the natural gas glut into export revolution. The company's gas supply deals with Poland, Lithuania, South Korea, China and India are likely to boost its revenue growth trajectory in the coming years. Early this year, Cheniere Energy clinched a deal with China National Petroleum Corporation to sell around 1.2 million tons of LNG per year. The company is poised to enter into more LNG contracts as it boasts of significant projects like Sabine Pass or Corpus Christi facilities.
Considering the secular shift to the cleaner burning fuel for power generation worldwide and in the Asia-Pacific region in particular, Cheniere Energy is likely to cash in on the development. Per China's pollution-control measures, the use of coal for heating purposes is expected to go down, thereby giving a boost to the country’s LNG demand in the coming years. By 2030, China is believed to become the largest LNG importer. Cheniere Energy is likely to meet the rising demand for LNG in China and strengthen its hold in Asia.
Zacks Rank and Another Key Pick
Cheniere Energy currently sports a Zacks Rank #1 (Strong Buy).
Meanwhile, one can also consider Bonanza Creek Energy, Inc. (BCEI - Free Report) , another Ranked #1 company in the same industry. You can see the complete list of today’s Zacks #1 Rank stocks here. Bonanza Creek delivered positive earnings surprise in each of the last four quarters, with the average being 215.36%.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>