Wells says LNG market will grow as supply boom drives prices lower. Stocks to play the trend

The global liquid natural gas market will continue to grow robustly through 2030 as capacity ramps up, lowering prices and expanding the market in countries where coal is currently cheaper, according to Wells Fargo. The supply of LNG worldwide should grow by an average of 31 million metric tons per year through the end of the decade — with capacity expanding by 30% or more from 2026 to 2028 — as new liquefaction plants come online, Wells’ team of analysts led by Roger Read told clients Tuesday. In total, global LNG capacity is expected to exceed 600 million metric tons by 2030, potentially outstripping demand, reducing volatility and creating a buyers’ market. This will allow LNG to scoop up market share from coal for power generation in major economies such as India. Wells recommends Chart Industries , ConocoPhillips and Shell to investors who want exposure to the booming LNG market. GTLS COP,SHEL YTD mountain GTLS, COP and SHEL in 2024 Chart has secured 32 projects worth $9.2 billion to increase LNG capacity globally, according to Wells. The bank’s current stock price target is $151, indicating 20% upside from Tuesday’s close. Conoco is positioned to deliver modest production growth with one of the lowest breakeven levels and is a leader in total and cash returns, Wells said. The company recently announced a long-term LNG sales agreement in Asia and a re-gasification contract with a terminal in Belgium. It also has major stakes in LNG facilities in Australia and Qatar — two of the world’s largest exporters. Wells’ stock price target for Conoco is $150, implying 33% upside from Tuesday’s close. Shell is the leading LNG producer worldwide with plans to add 11 million metric tons of annual capacity by the end of the decade, per the bank. To be sure, the oil major is trading at a discount relative to U.S. peers because its financial performance has disappointed and its energy transition strategy is increasingly unclear, Wells saod. Still, Shell’s leading position in LNG and clear pathway for growth in the space is one of its more attractive features. The bank has an $88 price target on Shell, suggesting 21% upside.