The advent of technology has brought natural gas from being primarily a regionally traded commodity to a global one. Modern gas production techniques have unlocked vast new sources, making it cheap to produce and transport the fuel to many locations around the globe. In a time where society is increasingly conscious of environmental impact, natural gas is increasing in popularity due to its lower carbon emissions. Specifically, the liquid form of gas, LNG, is connecting locations around the globe which were previously unable to trade due to the impracticality of building pipelines.
A key link in the LNG value chain consists of the companies which transport and offload the product. Several of these companies are publicly-traded and exhibit a unique feature of both high dividend payouts and growth potential through buildout of new vessels. The future cashflows of these entities is largely visible due to the nature of long-term contracts.
Today’s energy and MLP funds lack exposure to this segment of the stock market and disregard the potential for growth, even as the price of oil remains mired in an oversupply situation. Ashland is bringing the LNG strategy to investors with a targeted focus on this vital sector.