Piper Jaffray: European Nat Gas Pipeline Disruptions Positive For LNG & Chart Industries

Analysts at Piper Jaffray reiterate their "overweight" rating on Chart Industries Inc GTLS. The target price for GTLS is set to $24. Piper Jaffray mentions, “According to the International Energy Agency (IEA) nat gas represents ~25% of Europe's energy consumption. The continent produces slightly more than half of the current consumption with the remainder coming from pipelines and LNG importation (distant sources). Natural gas demand in Europe is projected to continue to increase in the coming years with no apparent alternative to reliance on distant sources. Pipeline supply comes predominantly from Russia via pipelines through the Ukraine that have been the subject of ongoing disputes between the countries with regard to pricing, disrupting supply, and underscoring the need for alternatives.” “As we pointed to in our initiation report on Chart dated 05-27-2010, liquefied natural gas takes up 1/600th of the volume of natural gas in its gaseous state and makes global transport of the commodity viable. European LNG imports have grown over the past decade, with Spain, France and England representing the largest importers. We believe LNG importation will continue to grow and facilitate construction of transport facilities spurring demand for Chart's equipment,” the analysts say. Piper Jaffray adds, “The dispute between Russia and Ukraine and the availability of cheap natural gas abroad including here in the U.S. as a result of weak demand and abundant shale gas is a favorable catalyst to the emergence of our global LNG demand thesis. While we believed the thesis would play out over time, a scarcity of natural gas in one part of the world, and an abundant supply in another could be the key catalyst to a robust near term facility construction cycle.” More Analyst Ratings here