OIL

Service companies spike on China LNG news

The share prices of a range of Australia's oil and gas service companies have risen sharply following the news of the North West Shelf's massive Chinese LNG deal.

The deal has sparked expectations of the construction of a fifth LNG train, which in turn focused attention onto the service companies.

Businesses such as Clough Ltd, Fleetwood Corporation, Mermaid Marine and the United Group all experienced rises in their share price - the battered Mermaid putting on around 50% to trade at around 33c.

Analysts believe companies such as those above will be well positioned to pick up more work in the Burrup Peninsula and Karratha from the increased workscope,

Mermaid has a newly upgraded wharf facility which it hopes will have a high level of usage. Clough, United and Fleetwood are already working on the 4th train and hope to maintain their good standing with the NWS partners and maintain the market share and increase their order book levels.

Also tipped for the Burrup area are the Methanex methanol facility, Oswal Fertilisers and a number of other gas-related proposals.

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