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Friday, April 18, 2014 - 11:30

This Boomtown Is Just Getting Started... Here's How To Profit

Friday, April 18, 2014 - 11:30am

It's an explosion of wealth that's about to shake the very foundation of the North American energy landscape. Investors who know about it early on stand to make a killing, while those who don't will be left wishing they had gotten in sooner -- before the big gains were already made.

I've been pounding the table about this for months... telling my subscribers about this little-known opportunity. It's right on the cusp of a massive influx of investment that may be unparalleled globally. And recent events show that we're getting close to the tipping point.

I'm talking about the world's first trillion dollar boomtown.

If you're a regular reader of StreetAuthority Daily, you might remember that I've written about this boomtown before. In fact, I've been telling my Junior Resource Advisor readers about this since October 2013.

I'm not telling everyone the name of this town right off the bat. I do this not to be coy, but rather because we're still in the early stages. The mainstream press hasn't gotten a hold of this story yet, and once word gets out, the game's over. But the name of this town isn't as important as the trends taking place and the companies operating there.

Located in a remote region in Western Canada, this small town is benefiting from two huge resource trends: natural gas and copper/gold mining...

Today, I want to focus just on natural gas.

Not only is this outpost situated in the center of massive new oil and gas deposits -- it's also located on the edge of a deepwater bay, giving cargo ships easy access to the ocean.

Once the infrastructure is completed, a recent Credit Suisse Global Equity Research report estimates that firms in this future boomtown will be able to produce natural gas for $4 per million BTUs (MMbtu).

To understand the potential, one only has to look at a chart of natural gas prices in the U.S. (which have fallen over the past several years thanks to the shale boom) compared to the rest of the world (where prices have risen):

As you can see, gas prices in the U.S. are around $4.70 (per MMbtu). Meanwhile, in countries like Brazil and Japan, that same gas is fetching upwards of $16 per MMbtu.

Simply put, this is a huge opportunity.

Because of its prime location in Western Canada, companies operating in this boomtown are strategically positioned to sell liquid natural gas (LNG) to high-value markets like Japan and Korea at prices up to $15.65/MMbtu. That's 233% higher than the price in North America.

Keep in mind, we're still in the early stages of this story. LNG export terminals take years to build. But despite the longevity of these projects, I recently shared some important news with my Junior Resource Advisor subscribers about LNG exports that should have investors excited...

Last month, Canada's federal minister of natural resources gave formal approval to four proposed LNG export projects in British Columbia. This follows the approval of the projects by the National Energy Board -- Canada's energy regulator -- in December.

These projects are being pushed forward by many of the same names playing in the Australian LNG sector, including ExxonMobil (NYSE: XOM), BG Group, Imperial Oil (NYSE: IMO), Petronas and Japex.

The federal approval more or less gives the mega-projects a go-ahead from the regulatory side.

The trigger event I'm now looking for is a final investment decision from the project developers. Basically, a nod that -- yes -- they've made the ultimate decision to proceed with construction.

This all appears to hinge on one final hurdle the industry faces before this massive LNG undertaking can become a reality. Recently, negotiations took place between the government of British Columbia and Japan on tax policy for the LNG exports. The details of the negotiations should be released in the fall of this year, so we should know the specifics in just a few short months.

That said, we're already seeing natural gas producers operating in the region do well. Bellatrix Energy (NYSE: BXE), one of the largest producers operating in the boomtown, is up 18.5% since I originally told my subscribers about it back in October 2013.

As the LNG story continues to develop, Bellatrix -- as well as the rest of the commodities producers operating here -- should continue to prosper. If any weakness presents itself in share prices leading up to the fall of this year, then it could be the perfect opportunity to buy.

I will continue monitoring LNG companies operating in this region. Once we get the final word from the tax negotiations, I expect things to move quickly... and share prices of companies operating in this region will take off.

Keep in mind, LNG is just one interesting angle to the Canadian boomtown. And even more exciting for investors is the fact that we're still in the early stages. Be sure to stay tuned. In the coming days, I will share a follow-up essay with more details about this exciting story.

Note: The Canadian boomtown story is one that gets almost zero attention from the mainstream press. That will change soon as events progress and it becomes clear that the boom is a reality. But by then, all of the big profits will have already been made. It's for these reasons that I can't share the name of this town with you today (that's reserved for my Junior Resource Advisor subscribers). When word gets out, we could see gains of up to 60%, over the next 12 months, from some of my favorite picks in the region. To learn more about "The World's First $1 Trillion Boomtown," and the names and ticker symbols of stocks to profit from the trends at work in this town, go here.

Dave Forest does not personally hold positions in any securities mentioned in this article.
StreetAuthority LLC does not hold positions in any securities mentioned in this article.