This article was originally published on Daily Resource Hunter by Matt Insley
Love it or hate it, the liquefied natural gas (LNG) market is booming.
Today I’ve found a new way to play this massive opportunity.
As you’ll see, though, it’s an unconventional way to play the boom. In fact, from what I can tell, there aren’t many folks looking at this huge growth opportunity (and the one company set to cash in!)
First off, are you caught up on the LNG story?
As you likely know the U.S. is enjoying a massive renaissance in natural gas production. Fact is, with new technology, a lot of the natural gas that was previously “trapped” in tight shale formations is now set to hit the market. And over the next few decades we’re in for a massive surplus of clean-burning natural gas.
As I type we’re producing more natural gas than ANY TIME in U.S. history.
That’s great news for America’s future – cheap and abundant fuel can help boost our economy and more! But it also presents a new set of opportunities — opportunities that just a few years ago would have seemed absurd.
One of the newfound opportunities is the idea that the U.S. will become a net exporter of natural gas. Heck, in 2005, with dwindling natural gas supplies, most analysts thought we’d be IMPORTING natural gas. Fast forward 10 years and we’re at the other end of the spectrum!
But here’s the thing about natural gas: other than via pipeline, it’s not easy to export.
Liquefied natural gas or “LNG” is the most efficient, large-scale method of transporting natural gas. By super-cooling natural gas to negative 260 degrees, the gas is turned to liquid and the volume is greatly reduced. That means you can ship more energy in a smaller space – putting it on the same scale as crude oil shipping.
But as you’d expect, super-cooling natural gas to negative 260 degrees isn’t an easy process and requires a lot of infrastructure. Specialized tankers, export facilities to liquefy the natural gas, import facilities to re-gasify it, and all sorts of other high-tech infrastructure.
Add it all up and the U.S. is ratcheting up its LNG infrastructure. And as you’d expect the companies that are in the middle of this boom are making out like bandits. Over the coming years LNG export terminals and LNG shippers could be in for a ride higher.
But there’s something that may be even better…
Regardless of the export scenario (as long-time readers know I’m not 100% sold on the longevity of exports just yet), there’s another surefire way that you can play the domestic LNG market.
I call it the “inland” LNG play.
That’s because the company we’ll look at could cash in regardless of the seaborne export situation.
Without further ado, let me introduce you (or re-introduce you ) to Trinity Industries (TRN.)
Trinity has been a major player so far in America’s energy comeback. No, the company isn’t an energy producer. And no, they don’t even own any pipelines or energy assets.
Okay, so Trinity isn’t your normal U.S. energy play, but the company does bring a lot to the table.
Trinity is the:
- Leading manufacturer of railcars in North America
- Leading manufacturer of railcar axles in North America
- Leading manufacturer of railcar coupling devices in North America
- Leading provider of railcar leasing and management services
- Leading manufacturer of inland barges in the United States
- Largest manufacturer of fiberglass covers for barges in the United States
- Leading producer of storage containers and tank heads for pressure and non-pressure vessels in North America
That’s right. Trinity is THE player when it comes to America’s rail-boom – and a key player in making sure America’s newfound oil can get to market.
Although the list above is impressive, you may notice one thing missing. That is, all of the information above pertains mainly to oil.
What the heck does this have to do with natural gas and LNG?
Well, I’m glad you asked…
Earlier this month, virtually under the radar….without a peep… barely a word, even on a well refined google search…. Trinity announced the acquisition of WesMor Cryogenic.
(Sorry to all of the Austin Powers fans out there, when we talk about “cryogenic” here we’re not talking about deep-freezing Mr. Bigglesworth.)
Okay, so what would Trinity want with a little old cryogenic company?
Well when it comes to freezing and liquefying natural gas, it all comes back to CYROGENICs. Indeed, you can’t do LNG without it. And now with the WesMor deal, I believe Trinity is on target to become the nation’s foremost provider of LNG shipping containers.
This is about as big an opportunity as you’ll see, my friend. However, a simple Google News search will provide you with a mere THREE valid results when you type in: trinity cryogenic. Talk about under the radar – this deal is like an invisible ninja riding in the cockpit of a stealth bomber.
If you get my drift, this deal is huge.
Over the past two years trinity has made a killing amidst the oil shipping boom and this recent deal paves the way for the company to make another killing amidst a natural gas boom.
If you want to do LNG powered trains? LNG storage tankers? LNG transport trucks? Heck, if you even want to do natural gas powered cars, you’re likely going to need to run some natural gas through something with a Trinity nameplate on it.
Add it all up and this silent deal could be your ticket to a well-timed double. As you saw from the bulleted list above, Trinity is the leader in all things rail. So you can rest assured that when it comes time to transport inland LNG, this company will be in the sweet spot.
Keep your boots muddy,