3 energy producers to buy for the upcoming LNG export business

The LNG industry is changing Australia. By 2020 the LNG export business from QLD and the offshore LNG projects near WA are expected to export about the same amount of gas as Qatar, the world’s current number one exporter.

For investors interested in the energy industry, there are three stocks you should know to stay up on this growth story.

Woodside Petroleum Limited (ASX: WPL) is the largest oil and gas company listed on the ASX at $31.3 billion in market capitalisation. It has huge development projects like Browse, Pluto and the North West Shelf offshore from WA. It is developing sites in the Gulf of Mexico also.

It is planning to build a floating LNG processing facility for its Browse project rather than on-shore facilities. The company estimates the cost savings with this new technology are huge.

Santos Limited (ASX: STO) reported a full-year net profit of $516 million, in line with 2012’s result. It has developments and processing facilities in the Cooper Basin, which straddles the SA-QLD border.

The region is turning into a hotbed of oil and unconventional gas development. It is partnering with smaller energy producers that have exploration tenements in the area to maximise production. With its existing infrastructure, it can move gas to the eastern states for domestic use or towards QLD for exportation.

Origin Energy Limited (ASX: ORG) is involved in power generation and retail electricity and gas distribution, but is an energy producer as well. It has development sites in the Cooper and Otway Basins in SA and the Surat Basin in QLD.

It entered into an agreement with Senex Energy Limited (ASX: SXY) to farm into two of its operating areas in the Cooper Basin. This will help the junior energy producer’s exploration, and Origin will gain access to potentially gas rich sites.

Foolish takeaway

Of these three, I prefer Woodside Petroleum because it has better profit margins and quite a low net gearing. Projects like Browse may have big price tags on them, but the potential resources are huge. A large company needs large projects just to get the same or better growth.

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Motley Fool contributor Darryl Daté-Shappard does not own shares in any company mentioned. 

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