Shares of Liquefied Natural Gas Ltd (ASX: LNG) soared 28 cents, or 6%, to $4.85 in early trade today as the market responded to yet another positive update from its fully-owned subsidiary, Magnolia LNG.
Up an astounding 1,550% since the beginning of 2014, Liquefied Natural Gas Ltd shares have soared on the back of positive operational updates from Magnolia LNG – located in Louisiana, USA – and Bear Head LNG – located in Nova Scotia, Canada.
If/when the two projects get from their current state (design phase) through construction and into production (Magnolia LNG originally targeted first production by 2018) then shareholders are likely to be very well rewarded.
As it stands much of the design work has been undertaken and both projects are in the final stages of seeking the necessary regulatory approvals and have secured a number of commercial agreements with gas suppliers/customers and construction partners. I recently outlined the process in more detail in this article.
The company says it has been issued a Notice of Schedule for Environment Review (SER) from the United States Federal Energy Regulatory Commission (FERC). It has set November 16, 2015 as the date for the anticipated issuance of the Magnolia LNG project's final environmental impact statement (FEIS).
"The SER is a critical milestone for the Magnolia LNG project," the company said in its announcement. It not only sets an issuance date for the FEIS, it also sets a 90-day post-FEIS deadline for all federal authorizations on the project."
"We are very pleased with our progress on the FERC regulatory aspects of the project," Liquefied Natural Gas Ltd CEO, Maurice Brand, said. "We appreciate the efforts of FERC and other agencies to process our application and remain confident that the Magnolia LNG project will meet or exceed all of the environmental and safety elements of the multi-agency review."
Should you buy Liquefied Natural Gas Ltd shares today?
Since I originally recommended readers buy Liquefied Natural Gas Ltd shares back in March 2014 the stock has jumped 1,400% higher. Whilst the risk-reward trade off isn't nearly as good as it was back then, if the company can get both Magnolia LNG and Bear Head LNG projects running its shares will likely be worth much more than they are today.
However, if things don't go as smoothly as planned, investors can expect significant selling pressure because it remains a somewhat speculative punt – despite having a $2.25 billion market capitalisation!
