After this past week of heat – wave oppression, it might come as a shock to most to find out that the US is still sitting on too much natural gas. But that’s not necessarily a bad thing for investors.
Although nat gas is produced at the same pace year round, the demand fluctuates seasonally. And the extra that isn’t used during the off seasons needs a place to be stored. Currently there is 4.5 trillion cubic feet of storage capacity in North America, but as we move toward a natural-gas future – something Cramer thinks is very likely – even more storage space will be needed.
So how do you capitalize on the trend? Only two companies publicly trade natural gas storage stocks, PAA Natural Gas Storage and Niska Gas Storage Partners . Both companies went public within just weeks of each other (April 29 and May 11, respectively). However, PNG is up 12.7% since going public, while NKA is down 8.2%. This may be due to PNG’s two natural gas storage facilities, one smartly located at the intersection of eight high-capacity gas pipelines in Louisiana that can take natural gas to the Northeast, Midwest and Southeast, known as Pine Prairie, and the other in Michigan, known as Bluewater. Pine Prairie holds 24 billion cubic feet of capacity, while Bluewater holds 26 billion cubic feet.Page 1 of 3 | Next Page