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Eni (E) Joins Qatar Gas Project to Increase LNG Exports

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Eni SPA (E - Free Report) has been selected by Qatar Energy for the North Field expansion project to improve Qatar’s position as a major liquefied natural gas (“LNG”) exporter globally.

Russia’s aggressive invasion of Ukraine brought pressure across the world to develop alternative energy sources as Western countries seek new supplies after phasing out purchases of Russian oil.

The Eni-Qatar Energy joint venture will hold a 12.5% interest in the North Field expansion project, which includes four mega LNG trains with a combined capacity of 32 million tons per annum (Mtpa). Qatar Energy will own a 75% stake in the joint venture, while Eni will own the rest. 

The North Field expansion project is expected to raise Qatar’s LNG production capacity from 77 Mtpa to 110 Mtpa. The $30-billion project is likely to commence production in the fourth quarter of 2025.

The project’s second expansion phase will be the North Field South project, further lifting the nation’s LNG production capacity from 110 Mtpa to 126 Mtpa. Production is expected to begin in 2027.

Raising awareness regarding the adverse effects of carbon emissions led to the increasing use of clean energy sources. Due to its clean burning nature, natural gas is a popular choice of clean fuel to generate electricity. As it is difficult to transport large volumes of natural gas, LNG use is a perfect solution.

The agreement aligns well with Eni’s ambition to diversify into cleaner and more reliable energy sources. The move expands the company’s presence in the Middle East and gains access to a world-leading LNG producer. Eni’s collaboration with Qatar Energy on the North Field expansion project will contribute to the security of gas supplies.

Price Performance

Eni’s shares have lost 10.6% in the past three months compared with the 4.5% decline of the industry.

 

Zacks Investment Research
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Zacks Rank & Stock to Consider

Eni currently has a Zack Rank #3 (Hold).

Investors interested in the energy sector might look at the following companies that presently flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Phillips 66 (PSX - Free Report) is the leading player in each of its operations like refining, chemicals and midstream in terms of size, efficiency and strengths. PSX currently has a Zacks Style Score of A for Growth and Momentum, and B for Value.

Phillips 66 hiked its quarterly dividend to 97 cents per share, representing an increase of 5% from the prior quarter. With the recent resumption of the stock repurchase program, the increment in the quarterly dividend represents Phillips 66’s strong focus on returning capital to stockholders. Since the company’s inception in 2012, this has resulted in its 11th annual dividend hike.

Antero Resources (AR - Free Report) is among the fast-growing natural gas producers in the United States. AR currently has a Zacks Style Score of A for Growth and Momentum.

Antero Resources is targeting a capital return program of 25-50% of free cash flow annually, beginning with the implementation of the share repurchase program. The company’s board authorized a share repurchase program of up to $1 billion of outstanding common stock.

Sunoco LP (SUN - Free Report) is among the largest motor fuel distributors in the U.S. wholesale market by volume. SUN has a Zacks Style Score of A for Value and B for Growth.

For 2022, Sunoco revised its adjusted EBITDA guidance upward to $795-$835 million from the previously mentioned $770-$810 million. The metric also suggests an improvement from the $754 million reported last year.


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