Natural Gas Demand Reportedly Booming

Natural gas demand has been an unexpected beneficiary of the green revolution, leading to a boom in demand for natural gas as a multi-year trend. Companies that supply major parts necessary for the natural gas business, like Chart Industries, report that business is booming and that booming business is very likely to continue.

Natural gas is also used for other products, such as ethane and propane, and is the preferred raw material for the rapidly growing hydrogen market. The midstream industry, which transports and stores natural gas products, is already edging into parts of the cracking process that change ethane to ethylene and propane to propylene. When the time comes, the industry is fully prepared to transport hydrogen.

The midstream industry has long been a relatively low-cost way to participate in the continuing natural gas boom, as it is considered the utility of the natural gas industry due to its relative safety. Midstream companies have take-or-pay provisions to limit the downside when upstream cycles lower, making the stock price more stable and paying hefty yields, often 8% or more.

This is great news for investors who are looking for recurrent income. Technology will continue to advance to enable us to recover more natural gas at a reasonable cost for centuries to come. Midstream companies pay hefty yields, often 8% or more, which is great news for investors who are looking for recurrent income.