Be wary

Regasification is the process by which liquefied natural gas is changed back into gaseous natural gas.

Why is this important? It allows countries to import its natural gas from anywhere in the world. Look at the sharp increase in the LNG regasification capacity for North America. This growth will be centered in the United States, which is expected to account for nearly 381 billion cubic meters of imports a year.

The U.S. has seen its natural gas production flatline over the past couple years. We've been relying more and more on imports from Mexico and Canada. These new regasification plants will open up the playing field and make the U.S. a global competitor for world natural gas supplies.
But here's the thing: The U.S. is building these plants at a faster rate than it expects to import LNG. In other words, there will be a glut in the U.S. market -- not of natural gas, but of capacity. That's not good for LNG companies building these plants when 85% of that capacity will be lying idle.

Be wary of buying any hard-core LNG company building strictly here in North America, like Cheniere Energy, Inc. (LNG), for example. In fact, we're already seeing weakness: The company reported earnings last Friday with net income dropping almost 22% quarter over quarter.