My thesis is that:
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The price drop on LNG is caused by the accident at Freeport. This delays production for 90 days. But this is just a temporary set back.
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The secular trend should be massive increase in LNG as in the long term as America is still committed to help Europe offset their loss of energy from Russia.
Possible bear cases to my bull case:
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Europe simply doesn't have the capacity to receive more LNG from America, and by the time they finish building the ports required to receive them, the Russian war is probably long over and the Russian pipelines are running again.
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If LNG gets expensive enough, there will be incentive for energy companies to start building pipelines and extraction nodes for them. LNG is not rare — they are simply expensive right now because we have under invested in the infrastructure to capture and transport LNG.
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Natural gas prices are super high right now. We're not “buying the dip” exactly.
My question to you guys:
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Do you see this as a big buy the dip opportunity? If you think LNG will remain elevated for years to come, why do you think so?
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What stocks do you like the most in this space? What do you think of Coterra?
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