THE AI REVOLUTION NEEDS ENERGY
US natural gas demand is growing to supply data centers and LNG exports. We believe midstream energy infrastructure offers predictable cash flows to investors.
The Long Term LNG Outlook Keeps Improving
LNG export terminals usually have the ability to export more than their nameplate capacity. This is how we exported a record 18.8 Billion Cubic Feet Per Day (BCF/D) of natural gas in March, compared with FERC’s estimated sustainable limit of 14.6-15 BCF/D. Venture Global’s (VG) Plaquemines facility was the strongest at exceeding stated capacity. Cheniere’s […]
LNG Investors Contemplate The Long Run
The disruption of Liquefied Natural Gas (LNG) exports from Qatar has a short term and long term consequence. As spot benchmark prices rose in Europe and Asia, traders focused on the near-term profit opportunity. LNG export terminals contract most of their capacity for long periods (10-20 years) to reduce their exposure to gas prices. Of […]
Higher For Longer
Trump 1.0 was not kind to energy investors. Although the sector welcomed his pro-energy regulatory approach, it came with a desire for low oil prices. Covid was the final straw as lockdowns forced everyone to stay at home, crushing oil demand and briefly sending crude prices negative. The American Energy Infrastructure Index (AEITR) delivered –6.2% […]
Not Yet A Crisis
It’s not easy to make the Persian Gulf safe for commercial shipping. On Wednesday a Thai vessel was hit by three “unidentified projectiles” near the Strait of Hormuz and caught fire. Several other vessels were hit towards the end of the week. In total 22 civilian ships have been hit in the Persian Gulf since […]
The Long Term Bullish LNG Story
The negative correlation between energy and the stock market that we highlighted last Sunday (see AI Moves The Energy Sector) continued last week, unsurprisingly given the news. We had thought global natural gas markets were more vulnerable than crude oil to conflict, and this turned out to be true. Qatar represents only 20% of global […]