Malaysian national oil company Petronas ended months of speculation by saying Tuesday it expects to spend up to $16 billion to build a liquefied natural gas export facility and related infrastructure in British Columbia, Canada.
The key infrastructure includes up to $11 billion worth of LNG liquefaction plants to be built near the B.C. port of Prince Rupert, plus a $5 billion (750 kilometre) pipeline to be constructed by TransCanada Corp.(TSX: T.TRP to supply gas to the plants., Stock Forum)
B.C. Natural Gas Minister Rich Coleman said Tuesday that the project will likely take about two years to stick handle its way through the regulatory permitting process.
If the buildout goes ahead as planned, there are a number of companies that are poised to benefit, says oil sector analyst Keith Schaefer of the Oil & Gas Investments Bulletin.
One of them is Macro Enterprises Inc. (TSX: V.MCR, Stock Forum), a pipeline industry service provider, which was trading last week at $3.52, leaving the company with a market cap of $76 million, based on 24.3 million shares outstanding.
Schaefer said recently he bought the stock at $2.12 after discovering that the company has kept an extremely low profile. That was before the stock jumped to around $2.40 after B.C.’s ruling Liberals were returned to power in last month’s provincial election.
Here are some of the other potential beneficiaries of an LNG buildout:
Aveda Transportation and Energy Services (TSX: V.AVE, Stock Forum), which traded this week at $2.30, leaving the company with a market cap of $23 million, based on 9.9 million shares outstanding. The 52-week range is $2.88 and $1.42. Aveda provides specialized transportation services to companies engaged in exploration, development and production of petroleum resources.
Cordy Oilfield Services Inc. (TSX: V.CKK, Stock Forum), which traded this week at 16 cents, leaving a market cap of $14 million, based on 87.9 million shares outstanding. The 52-week range is 32.5 cents and 14.5 cents. Cordy provides management and financial expertise, and resources to companies in the oilfield services sector.
Mullen Group Ltd. (TSX: T.MTL, Stock Forum), which traded this week at $21.64, leaving the company with a market cap of $1.95 billion, based on 90.1 million shares outstanding. The 52-week range is $23.95 and $19.85. Mullen is Canada’s largest provider of specialized transportation and related services to the oil and natural gas sector. It also offers management and financial expertise.
Enterprise Goup Inc. (TSX: T.E, Stock Forum), which traded at 70 cents this week, leaving the company with a market cap of $50 million, based on 71.2 million shares outstanding. The 52-week range is 74 cents and 13 cents. Enterprise Group is a consolidator of construction services companies operating in the energy, utility and transportation infrastructure industries.
Canyon Services Group Inc. (TSX: T.FRC, Stock Forum), which traded this week at $11.79, leaving the company with a market cap of $733.8 million, based on 62.2 million shares outstanding. The 52-week range is $12.50 and $8.76. Canyon Services is a provider of hydraulic fracturing and other well-stimulation services.
Entrec Corp. (TSX: V.ENT, Stock Forum), which traded this week at $1.38, leaving a market cap of $147 million, based on 106.6 million shares outstanding. The 52-week range is $1.95 and $1.05. Entrec is a leading heavy lift and haul company, operating in northeastern B.C. and Alberta. Last week, Entrec announced a deal to acquire GT’s Crane and Transportation Services Inc. and the Grande Prairie, Alta., company’s operating subsidiaries. GT’s operates a fleet of 45 cranes, as well as trailers and tractors.
Western Energy Services Corp. (TSX: T.WRG, Stock Forum), which traded this week at $7.62, leaving a market cap of $552.5 million, based on 72.5 million shares outstanding. The 52-week range is $8.51 and $5.32. Western is the sixth largest drilling contractor in Canada, with a fleet of 45 rigs. The company also has five rigs deployed in the U.S.
News that Petronas is set to develop the Pacific NorthWest LNG project comes after it completed the $6 billion takeover last year of Progress Energy Resources Corp. One of the first fuel buyers will be Japan Petroleum Exploration Co., which owns a 10% stake in the LNG project.