LPG steals the spotlight

A leading equity analyst has initiated research coverage of four publicly-traded operators that are poised to cash in on what he believes to be one of shipping’s hottest sectors.
Dorian's Captain Markos NL

Webber noted efforts to establish the infrastructure needed to support an uptick in exports are already underway.

Michael Webber of Wells Fargo Securities stamped Avance Gas Holdings, BW LPG, Dorian LPG and Navigator Holdings with “outperform” rationings based on a bet that the LPG segment is in “the early innings of shipping’s next revolution”.

In an inaugural briefing about the gas sector and the rising stars of the maritime arena the researcher noted that the owners of LPG carriers have been thrust into the spotlight by the renaissance of shale gas production in North America.

“Improved drilling techniques have drastically increased the amount of recoverable natural gas and crude in shale regions such as the Bakken, Eagle Ford, and Marcellus, which has driven lower production costs and higher volumes of gas, crude, and related byproducts,” he continued.

“Beyond that straightforward story, [natural gas liquids] NGLs like propane, butane and ethane are also poised to see significant production ramps, with the potential for a developing export trade already reshaping the landscape of shipping equities.”

With the exception of Navigator Holdings, which completed a New York listing late last year, Webber is confident that several of the Oslo-quoted initiates will pursue initial public offerings in the Big Apple at some point in the coming months.

While Webber is not the first equity analyst to cover the likes of Avance Gas, BW LPG, Dorian, Navigator and StealthGas it is widely believed he is the only Wall Street researcher following all five of the publicly-traded LPG carrier equities.

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