Liquefied Natural Gas

AU: LNGL

AU$163m market cap

AU$0.29 last close

Liquefied Natural Gas Ltd is an ASX-listed company devoted to the development of LNG export terminals in the US, Canada and other potential locations. It has traded ADRs.

Investment summary

The focus for Liquefied Natural Gas (LNGL) remains the signature of long-term offtake contracts for Magnolia LNG, the company’s flagship LNG export terminal in Lake Charles, Louisiana. In March 2019, authorisation was received from the US Department of Energy (DOE) for expansion of export capacity to 8.8Mtpa (from 8.0Mtpa) to free trade agreement (FTA) countries. Management expects FERC approval and non-FTA consent from the DOE to follow shortly. Edison’s valuation has been updated to reflect higher Magnolia export capacity, offset by our assumption of lower contract pricing. The net impact is a decrease in valuation from A$1.01/share to A$0.70/share. Key valuation drivers include sale and purchase agreement (SPA) pricing, cost of funding, timing of first gas exports and the risking we apply to Magnolia and Bear Head projects proceeding.

Y/E Jun
Revenue (A$m)
EBITDA (A$m)
PBT (A$m)
EPS (fd) (c)
P/E (x)
P/CF (x)
2017A 0.6 (26.8) (26.7) (0.1) N/A N/A
2018A 1.9 (21.7) (21.5) 0.0 N/A N/A
2019E 0.0 (30.7) (30.3) (0.1) N/A N/A
2020E 0.0 (33.8) (34.0) (0.1) N/A N/A
Last updated on 18/06/2019
Industry outlook

A significant opportunity exists to take advantage of the arbitrage between North American gas prices (Henry Hub and AECO), Asian spot LNG prices and European gas prices (TTF).

Last updated on 18/06/2019
Sector
Oil & gas
Share price graph
Balance sheet
Forecast net cash (A$m) 19
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual (26.0) (41.8) (45.2)
Relative* (27.6) (44.9) (48.5)
52-week high/low A$0.8/A$0.3
*% relative to local index
Key management
Richard Beresford Chairman
Mike Mott CFO
Norman Marshall CFO

Content on Liquefied Natural Gas

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