Natural gas is an abundant resource. It's also cleaner and cheaper than other fossil fuels, such as oil and coal.
However, natural gas has a significant disadvantage. Gas must travel from production basins to market centers by pipeline. Since it's not easy to build pipelines across oceans, that puts many international markets out of reach. Companies must turn natural gas into a pressurized liquid and transport it using specialized ships that can carry it to overseas markets.
Energy companies are investing billions of dollars in building liquefaction facilities in hopes of cashing in on the growing international demand for liquefied natural gas (LNG). Here's a look at what's ahead for the sector and the companies in the best position to cash in on the growing global LNG demand.
An overview of the LNG market
Global LNG trade reached 407 million metric tons (MT) in 2024, according to industry leader Shell (SHEL +1.57%). That's a 2 MT rise from 2023, the lowest increase in a decade, due to constrained new supplies.
Shell expects global LNG demand to rise more than 60% by 2040. Fueling that forecast is economic growth in Asia, emissions reduction in heavy industry and transport, and the rise of artificial intelligence (AI).
Several companies are investing to meet future needs. They are exploring for more natural gas resources and also developing LNG export and import infrastructure. The investments could pay big dividends for LNG-focused companies, provided the demand grows as expected and pricing stays attractive.
Law of Supply and Demand
What are the top LNG companies?
Many of the world's largest LNG producers are state-controlled companies. Qatargas, owned by the government of Qatar, is one of the world's largest LNG producers. Qatar was the world's top LNG producer until 2023, when the U.S. overtook the Middle Eastern nation as the LNG leader for the first time in history.
Although state-owned companies are a force in the LNG market, they're not alone. Several publicly traded energy companies rank among the LNG sector's biggest producers. Here are five top LNG stocks for investors to consider:
| Name and ticker | Market cap | Dividend yield | Industry |
|---|---|---|---|
| ConocoPhillips (NYSE:COP) | $113.5 billion | 3.46% | Oil, Gas and Consumable Fuels |
| Cheniere Energy (NYSE:LNG) | $44.9 billion | 0.99% | Oil, Gas and Consumable Fuels |
| ExxonMobil (NYSE:XOM) | $496.8 billion | 3.40% | Oil, Gas and Consumable Fuels |
| Shell Plc (NYSE:SHEL) | $215.5 billion | 3.81% | Oil, Gas and Consumable Fuels |
| TotalEnergies (NYSE:TTE) | $145.0 billion | 5.47% | Oil, Gas and Consumable Fuels |
1. Cheniere Energy
NYSE: LNG
Key Data Points
2. ConocoPhillips
NYSE: COP
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ConocoPhillips (COP +2.82%) is becoming a major player in the global LNG market. The U.S. oil and gas giant owns interests in LNG production facilities in Australia, Qatar, and Equatorial Guinea.
The company is actively expanding its global LNG portfolio. It has a 30% interest in Port Arthur LNG, which should start up in 2027. It's also an investor in two new LNG expansions in Qatar (North Field South and North Field East). Additionally, the company has signed LNG purchase agreements for projects on the U.S. Gulf Coast and the west coast of Mexico. It has also signed regasification agreements in Europe and sales contracts in Asia.
ConocoPhillips' investments in LNG will help fuel considerable free cash flow growth through the end of the decade.
3. ExxonMobil
NYSE: XOM
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ExxonMobil (XOM +2.10%) is a global leader in LNG. The oil and gas giant owns interests in several LNG projects across the world that produce 23 million tons per year. Notable investments include ownership interests in Gorgon LNG, PNG in Papua New Guinea, and several LNG trains in Qatar.
LNG is one of ExxonMobil’s four areas of strategic investment focus through 2027. The company is investing in several projects, aiming to grow its global capacity to 27 MTPA. One notable investment is the more than $10 billion Golden Pass LNG project in the U.S. The joint venture with QatarEnergy will have the capacity to export about 18 million tons of LNG per year starting by the end of 2025.
ExxonMobil is also working with QatarEnergy, Shell, TotalEnergies, and others to expand the North Field in Qatar. The two-phase expansion will feature six LNG trains that will grow the capacity from 77 MTPA to 126 MTPA by 2027. The first phase will cost an estimated $30 billion.
These investments will enable the oil giant to achieve its bold goal of roughly doubling the size of its LNG business to around 40 million tons per year by 2030.
4. Shell
NYSE: SHEL
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Shell (SHEL +1.57%) was an early pioneer in the LNG market and has grown into a dominant force over the years. The company has LNG supply projects in 10 nations representing around 40 million tons of capacity. It also has interests in a couple of regasification plants that turn LNG back into gas so it can flow through local pipeline systems.
Shell operates an integrated gas business. It controls supply by producing gas from a variety of fields. The company also operates LNG export facilities and markets LNG -- from its own facilities and those operated by third parties -- to customers around the world. The combination enables Shell to keep costs low to maximize the value of the LNG it produces.
Shell is actively expanding its leading global LNG business. It aims to add up to 12 million tons of additional capacity by the end of the decade. It has projects underway in Canada, Qatar, Nigeria, and the UAE. Once complete, they'll help extend the company's dominance in the global LNG market.
5. TotalEnergies
NYSE: TTE
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LNG has a bright future
The world's economies will need an increasing supply of cleaner fuel in the decades ahead to help combat climate change. Due to its abundance and lower carbon emissions compared to other fossil fuels when burned, natural gas appears poised to provide a significant portion of that supply. LNG gives it the global access needed to reach key markets.
LNG demand is growing due to the rising global need for the cleaner-burning fuel. That fuels the belief that LNG stocks could do exceptionally well in the coming years as companies benefit from a global need for this type of fuel.
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