Sixteen years after BG Group began piping gas into Teesside from the North Sea, the FTSE 100 explorer and producer has found another way of getting its output to Britain.

Yesterday, BG took delivery of its first cargo of liquefied natural gas (LNG) to its newly commissioned Dragon terminal in Milford Haven. The 145,000 cubic metre shipment, which had travelled more than 4,000 miles from BG’s field in Trinidad, will be turned back into gas and pumped into the national pipe network.

Although BG has shipped LNG into the country before — on to the spot market through Centrica’s Isle of Grain terminal in Kent — yesterday’s delivery marks its first use of infrastructure in which the company has a stake: BG has a half-share of the £360 million South Wales terminal and, together with its partner, Malaysia’s Petronas, it has the right to bring in an annual 4.4 million tonnes of LNG for the next 20 years.

Such advances are something of a double-edged sword. Britain will enjoy a greater security of supply amid the depletion of North Sea reserves, while BG will make better margins from extending its reach further downstream. However, such expansion also puts pressure on UK gas prices that have already been weakened by lower industrial demand: they fell to a two-year low this week amid fears of an impending oversupply.

Apart from Dragon, the adjacent South Hook terminal — backed by Qatar Petroleum, ExxonMobil and France’s Total — opened for business in May, while the Isle of Grain is now in its first full year of operation. That dip is the short-term consequence of the boom in LNG investment over the past five years. Once commissioned, LNG liquefaction plants — in effect, huge industrial fridges — are expensive to switch off. On current estimates, it will not be until 2014 that LNG demand once again exceeds forecast capacity.

BG retains considerable flexibility — not least the ability to divert cargoes to Asia, where LNG prices are higher. It has also recently signed long-term supply agreements from China and Singapore for its LNG project in Australia, which is due to get the go-head next year.

Meanwhile, BG last month secured a foothold in US shale gas through a $1.3 billion joint venture. Further clarity on BG’s progress, together with an update on its Tupi deepwater discovery in Brazil, should come with first-half results on July 29. At £10.03, or 15 times earnings, hold on.

James Fisher

James Fisher is the stock market’s old salt. Long after Britain gave up its merchant fleet, this 162-year old Cumbrian company still makes a living from the sea: running coastal tankers, conducting ship-to-ship oil transfers, hiring out specialist mooring equipment and operating submarine rescue vessels.

Fisher has also been making forays ashore. Take Strainstall, its division which provides strain gauges to monitor tension on ships’ cables. Tightened safety procedures and an ageing transport infrastructure mean that Strainstall’s gadgetry is increasingly being used on Britain’s roads and railways: on the viaduct entering London’s Blackfriars and on about 100 bridges on the West Coast Main Line. In China, Strainstall’s equipment has been deployed on a new 1.4km road bridge over the Yangtze river to record how it responds to wind, climate and traffic vibrations.

Not only do such tools provide an early warning of potential problems but they should also enable maintenance spending to be targeted more effectively.

But Strainstall is representative of Fisher as a whole: a small highly skilled niche in which it can build a substantial market share and make double-digit operating margins.

So it is that Fisher has forsaken the highly cyclical and asset intensive business of bulk shipping in favour of a collection of focused defensible businesses. It has not been immune from recession: its coastal tankers (which ship oil from refineries to local depots) have suffered from lower volumes. However, any weakness should be more than offset by growth elsewhere while, after an 18-month hiatus, Fisher is well-placed to make bolt-on acquisitions.

At 401p, or nine times earnings, buy on weakness.

Alphameric

Forget the nags. Shares in Alphameric, which beams live racing footage into bookies’ shops, have proved the better bet this year — more than doubling since January.

Yesterday’s first-half figures went some way to explaining that form. After three years of losses, the small-cap software company broke back into the black in the six months to May 31 on revenues up 17 per cent.

Further, a capital reorganisation has enabled Alphameric to return to the dividend list at the interim stage, with a forecast 1.65p payout for the full year providing a near 6 per cent yield at yesterday’s price.

That turnaround can be pinned on the coming of age of TurfTV which, after a long legal battle and resistance from bookies, now holds exclusive media rights to half of Britain’s racecourses — including Cheltenham, Epsom, Sandown and York — and has 95 per cent of betting shops under its belt. BetFred, the last big chain to hold out against TurfTV — in which Alphameric has a 50 per cent stake — signed up in April. With £8 million of start-up costs now sunk, that niche is highly cash-generative.

The problem is that the next batch of UK media rights do not come up for grabs until late 2011, meaning that Alphameric has limited short-term scope to extend its reach to other racecourses. Meanwhile, bookies are deferring spending on new IT systems — Alphameric’s other business — amid the consumer downturn.

At 28½p, or nine times earnings, the shares have run far enough for now. Pass.

Explore Markets

• United States

• Europe

• Japan

• China

• Russia

• The Gulf

• India

• Africa

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive