What Happened to the LNG Share Price?
Liquefied Natural Gas Limited [ASX:LNG] is focused on liquefied natural gas. Based in Perth, the company focusses on improving LNG performance using its own Optimised Single Mixed Refrigerant (OSMR) LNG processing technology.
LNG have two key projects: the Australian Fisherman’s Landing LNG project and the Magnolia LNG project in the US.
On Wednesday the company closed 3.25% higher. At one point LNG was 6.14% higher.
Why Did This Happen to LNG Shares?
Volume in LNG shares over the past two trading days is four to five times higher than normal. Also the stock has risen 28.83% in the past five trading days. However, the increase in volume and investor interest could be a flow on effect from recent investor road shows held in Melbourne, Sydney and Brisbane last week. In addition, LNG held a corporate investor presentation Monday last week.
In addition, because of LNG’s Magnolia plant, the company is also benefitting from America’s push to increase the turnaround time for export permits.
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Since March this year, members of Congress in America have been trying to speed up permits to export natural gas to the Ukraine. The proposed bill 266-150, passed in late June, and permit approval time has reduced from 90 days to 45 days.
What Now For LNG Ltd?
The Ukraine receives almost half of its gas supply from Russia.
While US congress has increased the speed at which permits for non-free trade agreement countries are issued, it won’t help the Ukraine in the short term. The majority of natural gas export facilities in the US (Magnolia site included) won’t be ready for to ship overseas until 2018.
At present, the unrest and tragic geopolitical events in the Ukraine have boosted LNG share price.
In spite of these circumstances, LNG has been a standout performer this year. The stock has gained a massive 893.22% since trading resumed for 2014.
The Magnolia site in America is still under development and is on track. Expect a selloff in the short term. When a stock gains almost 29% in the short term, it’s smart to take some money off the table.
However, don’t be surprised if the stock continues to climb as the conflict in the Ukraine grows.
Shae Smith+
Editor, Money Weekend
The post Why the LNG Share Price Rose Today appeared first on Stock Market News, Finance and Investments | Money Morning Australia.
