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The 2014 All-America Research Team: Natural Gas, No. 1: Faisel Khan

< The 2014 All-America Research TeamFaisel KhanCitiFirst-Place Appearances: 2

Total Appearances: 9

Analyst Debut: 2006

Faisel Khan of Citi advances two positions to return to this winner’s circle for the first time since 2011. Contributing to the analyst’s popularity among investors is “his ability to synthesize key information and turn it into timely stock recommendations,” one client affirms, which “is a true rarity among his peers.” Given the continuing North American oil production boom; a large supply of natural-gas liquids, or NGLs; and abundant natural gas — and assuming that prices remain where they are — the researcher projects that the U.S. will post daily production growth of close to 10 million barrels for oil, natural gas and NGL-equivalent through the decade. That amount, he emphasizes, will drive $60 billion annually in capital spending for the industry through 2020. What’s more, “we probably haven’t fully tapped into the export story for natural-gas liquids and condensates,” adds Khan, 38. He cites Houston-based Enterprise Products Partners and Targa Resources Corp. as companies that will benefit from these trends. Both have the interconnectivity to move NGLs from the field to pipelines to fractionation plants, he notes, and then to their own dock facilities for export. He points out, furthermore, that “we still have a lot more oil infrastructure to build across the U.S.” As a result, Khan is advocating for a breakup of TransCanada Corp. as a way of gaining visibility on the operator’s oil pipeline within both the U.S. and Canada. “In the last decade you saw a lot of the big pipeline companies sell those businesses that weren’t really synergistic with each other,” he explains. “But TransCanada still holds a very big power business, so our view is they should spin off the power business and be left with this pure pipeline company. That would create shareholder value.” The analysts’ longevity bolsters his argument, one client notes: “Faisel’s grasp of the industry has been honed over many years of covering the space.”


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