May 2nd Energy Roundtable with Chart Industries CFO

May 8, 2013

Roulston Research recently held their energy roundtable on May 2nd with Michael Biehl, Executive Vice President and Chief Financial Officer of Chart Industries, as he talks about Chart’s unique position to play across the whole natural gas industry, from liquefaction to delivery, storage and use. Prior to joining the Company, Mr. Biehl served as Vice President, Finance and Treasurer at Oglebay Norton Company, an industrial minerals mining and processing company, as well as in the audit practice of Ernst & Young LLP in Cleveland, Ohio from 1978 to 1992. Michael discussed the outlook for domestic and global natural gas and LNG markets and discussed growth opportunities in the space. From an operational standpoint, Chart Industries have three global business segments: (1.) Energy & Chemicals, (2.) Distribution & Storage, and (3.) Biomedical and more than half of the company sales are outside of the US. In addition, more than half of sales are made to the energy markets.

The company expects strong growth in their distribution & storage market, while industrial gas seems to remain flat overall, as well as in Asia and Europe. Growth is expected to generate from Natural Gas, which presents an opportunities for those companies who are strategically positioned to leverage this growth. China seems to be ahead of the U.S. supply in natural gas and proclaims to double their natural gas market to 4.8%. Chart’s manufacturing facilities are strategically located in lower-cost countries to provide operating leverage and centered near demand. The company just expanded operations in China and is expected to expand some more, as  petrochemical companies have  jumped on board under the impression that liquefied natural gas (LNG) will be a large source of fuel in China, given the expected growth. China doesn’t currently have a pipeline infrastructure and a lot of natural gas fields; China has more shale gas than the US and is just starting to tap into it. As mentioned LNG is expected to grow and is in high demand for trucks, pressure pumping, and drill rigs, while passenger cars, and short deliveries, are ripe of compressed natural gas (CNG) opportunities. One of the interesting points of discussion is the strategic positioning made by non-competitor into the natural gas space due to the significance of the LNG natural gas market. A good example mentioned is Lockheed Martin move in to the market despite limited experience. As stated in their 2013 investors presentation, Chart Industries is one of the leading suppliers in all primary markets served, and is positioning its operations to capture growth opportunities wherever they may be found.  Distribution & Storage is growing $60 million in China alone, while their heat exchangers will grow about roughly $350 to 360 million through exports to china. If you are interested in listening to the podcast from the event or following up with Michael, please contact info@roulstonresearch.com.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: