Issue link: https://read.dmtmag.com/i/241540
declined over the past year. The Panama Canal expansion offers a market for both Buckeye's oil and natural gas businesses. Low natural gas prices have weighed on past earnings. With easier access to Asian markets, higher natural gas volumes may turn this segment around. Transportation Unlike Phillips or Buckeye, GasLog operates liquefied natural gas carriers that move between producers and customers. Since its IPO in April 2012, GasLog has steadily increased its fleet, revenues and dividends. The future should hold more of the same. GasLog projects LNG demand will grow 4.7 percent a year through 2025. This growth will be led by demand from Asia and likely be supplied by natural gas produced from shale gas plays in the United States. By GasLog's calculations, shipping costs should not be a barrier for U.S. to Asia LNG deliveries. Japan currently pays about $16/ MMBtu for natural gas. U.S. Henry Hub gas sells for $3/ MMBtu. Add $1/MMBtu for gasification costs and shipping costs, at most $3/MMBtu, and it makes sense to ship LNG from the U.S. to Japan. Can GasLog deliver for investors? The company's fleet has grown 50 percent since its IPO. The company took delivery of four LNG carriers in 2013, on time, on budget, and chartered from day one. This gives GasLog one of the youngest and most cost-effective fleets in the world. The company claims $2.2 billion in firm charters IDA UNIVERSAL January-February 2014 from BG Group and Royal Dutch Shell. So at the moment, the future looks good. Final foolish thought All three companies will benefit from the Panama Canal expansion. Of the three, Buckeye looks to me like the one to gain the most. Its Caribbean terminals give Buckeye flexibility to move crude oil or other products up and down the U.S. Gulf Coast, the Atlantic Coast, and Latin America. The Panama Canal expansion simply opens Asia up to the same trade. These terminals are roughly 500 miles closer to the Canal than the Gulf Coast. Given their proximity to so much oil in the Gulf of Mexico, these Caribbean terminals position Buckeye well to send energy products to Asia. ● www.fool.com/investing, Dec 1, 2013, Robert Zimmerman Trends continued on page 45 Trends continued on page 73 43