Financial Sense "Liquid Energy" by Elliott Gue 09/14/2007

Financial Sense "Liquid Energy" by Elliott Gue 09/14/2007: "In the most recent issue of The Energy Strategist, I took a detailed look at the Asian coal markets and how Australia is a key beneficiary of growing Asian coal trade. Much of the same is true for natural gas: Australia is fast becoming a major exporter of LNG to Asia. The nation is politically stable, and unlike many other resource rich countries, the government has been fair and transparent in its treatment of resource access and taxation. As a result, Australia has benefited from a massive increase in investment on the part of global energy firms. Source: EIA Australia’s natural gas production is set to increase at an annualized pace of 4.3 percent out to 2030. This is the fastest production growth projected for any country, anywhere in the world. The vast majority of that gas will be exported. In fact, Australia alone accounts for all the gas production growth forecast for the developed world out to 2030. I’ve studied the Australian market in recent years because the country's geographic proximity to Asia makes it an obvious beneficiary of rising Asian energy demand. The only problem is that Australian stocks have been tough for most US and Canada-based investors to access. But that's changing. Interactive Brokers recently gave account holders direct access to Australian stocks for a tiny commission.

Other brokers are considering following that move. And I've noticed that some of the US shares of Australian firms traded on the over-the-counter market have begun to pick up volume lately.

There are a number of ways to play the gas growth theme. One is to buy into the companies that supply compression equipment and provide engineering services necessary to build out LNG infrastructure--mainly gas liquefaction and regasification terminals. And I'm also looking more carefully at a number of Australian and US firms that will be big producers of LNG in coming years.