In January 2024, the Biden administration paused federal authorizations for several pending LNG export projects, citing concerns about environmental impacts and domestic energy security. The US Department of Energy later released an assessment indicating that increased LNG exports could add 1.5 gigatons of greenhouse gas emissions annually by 2050, equivalent to a quarter of the current emissions of the US. However, President-elect Donald Trump is set to reverse the Biden administration’s pause on liquefied natural gas (LNG) export approvals, marking a significant shift in US energy policy.
On January 1, Ukraine officially halted the transit of Russian natural gas to several European nations, marking the end of a five-year agreement and closing a chapter in Russia’s decades-long dominance over Europe’s energy markets. The termination of this deal comes amidst the ongoing war between Ukraine and Russia, with neither side willing to negotiate an extension. Europe is expected to rely heavily on liquefied natural gas (LNG) imports. Christoph Halser of Rystad Energy estimates that the EU will need to source approximately 7.2 billion cubic meters of gas from the global LNG market.
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As Europe pivots away from Russian gas, the United States emerges as a key player in filling the supply gap. US LNG exports to Europe have already been rising in recent years, and this shift presents an even greater opportunity for American energy producers. With robust infrastructure and increased LNG export capacity, the U.S. is well-positioned to strengthen its role as a reliable supplier to Europe, enhancing energy security across the continent while bolstering its own energy industry.
The growth of US energy exports hinges on significant investments in infrastructure. According to a report by ICF, prepared for the American Petroleum Institute (API), the development of US oil and gas infrastructure is expected to remain robust through 2035. The report highlights that the primary drivers for continued infrastructure development remain strong. Shale and tight oil resource extraction are projected to continue at a rapid pace, supported by advancements in extraction technologies and favorable market responses to competitive commodity prices. Total capital expenditures (CAPEX) for oil and gas infrastructure are projected to range between $1.06 trillion and $1.34 trillion from 2017 to 2035. This equates to an average annual investment of $56 billion to $71 billion, spanning various infrastructure components, including surface and lease equipment, gathering and processing facilities, pipelines for oil, gas, and natural gas liquids (NGLs), storage facilities, refineries, and export terminals.
As global energy dynamics shift, the United States stands poised to play a pivotal role in ensuring energy security for Europe while driving growth in its own energy sector. With that in context, let’s take a look at the 15 energy infrastructure stocks that are skyrocketing.
Close-up of a liquefied natural gas terminal expelling plumes of smoke.
Our Methodology
To compile our list of the 15 energy infrastructure stocks that are skyrocketing, we used Finviz and Yahoo stock screeners to rank the top 15 energy infrastructure stocks that achieved the highest gains over the past six months. We also included their hedge fund sentiment, which was taken from Insider Monkey’s Hedge Fund database of 900 elite hedge funds as of Q3 of 2024. The list is sorted in ascending order of 6-month performance, as of January 2.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
15 Energy Infrastructure Stocks That Are Skyrocketing
15. Targa Resources Corp. (NYSE:TRGP)
Returns in Past 6 Months: 38.54%
Number of Hedge Fund Investors: 45
Targa Resources Corp. (NYSE:TRGP) is a leading provider of midstream energy infrastructure and services, specializing in the gathering, processing, transportation, and storage of natural gas and natural gas liquids (NGLs). The company’s integrated business model, which includes gathering and processing, logistics and transportation, and marketing and distribution, enables it to offer a comprehensive suite of services to its customers, including producers, processors, and end-users of natural gas and NGLs. Targa Resources Corp. (NYSE:TRGP) has a significant presence in the Permian Basin.
Targa Resources Corp.’s (NYSE:TRGP) stock price has increased significantly, driven by a combination of factors. One of the primary drivers of this increase has been the company’s shift to the fee-based business model, which provides a stable source of revenue and reduces the company’s exposure to commodity price volatility. The company’s gathering and processing agreements along with logistics and transportation business have been structured as fee-based contracts, where producers pay a fixed fee for each unit of natural gas or NGLs gathered and processed. This provides Targa Resources Corp. (NYSE:TRGP) with a predictable revenue stream, regardless of the underlying commodity prices.
Looking ahead, Targa Resources Corp.’s (NYSE:TRGP) future outlook appears strong, driven by the growing demand for energy infrastructure in the Permian Basin. The company’s recent announcement of two new gathering and processing plants, Falcon 2 and East Driver, is expected to further drive growth and increase the company’s processing capacity in the region.
14. Golar LNG Limited (NASDAQ:GLNG)
Returns in Past 6 Months: 39.19%
Number of Hedge Fund Investors: 39
Golar LNG Limited (NASDAQ:GLNG) is a leading player specializing in LNG shipping, floating storage regasification units (FSRUs), and floating liquefied natural gas (FLNG) facilities. The company’s primary business involves the ownership and operation of floating LNG (FLNG) vessels, which are used to liquefy and transport natural gas from remote locations to markets around the world. Golar LNG Limited’s (NASDAQ:GLNG) clients include energy majors, utility companies, and governments seeking flexible and efficient LNG infrastructure.
One of the key factors contributing to the increase of Golar LNG Limited’s (NASDAQ:GLNG) stock price is the successful execution of its FLNG projects, including the start-up of its Gimi FLNG unit and the signing of a 20-year charter agreement with Pan American Energy in Argentina. This agreement is expected to generate approximately $500 million in EBITDA per year before commodity exposure.
Another factor contributing to the increase in stock price is the company’s announcement to increase its capacity. The company has recently ordered a new Mark II FLNG unit, which is expected to be delivered in 2027 and has also secured an option for a second Mark II unit. These new units will increase the company’s liquefaction capacity and provide opportunities for new contracts and revenue streams.