Shares of Liquefied Natural Gas Ltd (ASX: LNG) soared another 10% today, taking its year-to-date share price gains over 80%.
That compares to just a 9% return from the S&P/ASX 200 (ASX: XJO) (Index: ^AXJO).
Today, there was no company specific news which could explain its dramatic share price rise.
However fellow ASX-listed oil and gas stocks such as Senex Energy Ltd (ASX: SXY), Santos Ltd (ASX: STO), Woodside Petroleum Limited (ASX: WPL) and Drillsearch Ltd (ASX: DLS) have rallied higher today following a fifth consecutive daily rise in oil prices.
Liquefied Natural Gas Ltd is currently developing two major LNG tolling facilities: Magnolia, in Louisiana, USA; and Bear Head, in Nova Scotia, Canada.
Given these two projects are still in the design phase, a buoyant oil market (remember LNG prices are linked to the oil market) bodes well for the company to find financial backers and tolling partners to complete the projects.
Both projects, once constructed and in production, could be game-changers for Liquefied Natural Gas Ltd's share price. However they are at least three years away from production, at a minimum.
Many regulatory and operational risks also exist.
Should you buy Liquefied Natural Gas Ltd shares now?
As I wrote in March, shares of Liquefied Natural Gas Ltd (currently $4.33) have soared since the beginning of 2014, when they traded around $0.30. However 2015 could prove to be make-or-break for the prospective gas tolling company.
With both projects moving towards key milestones in mid-2015, coupled with a bounding share price so far this year, investors may want to wait a couple months before hitting the buy button – to allow us to assess the company's operational progress at Magnolia and Bear Head.
