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Eni (E) Delivers First LNG Cargo to Italy's Piombino Terminal

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Eni SPA (E - Free Report) announced that it delivered its first commercial liquefied natural gas (LNG) cargo to the Snam regasification terminal in Piombino, Italy.

This marks the onset of the terminal’s commercial operation. The Piombino regasification terminal is one of the two newly planned LNG facilities in Italy.

The company performed unloading operations after completing the testing phase. An initial, non-commercial cargo was provided in May 2023.

The terminal will produce two billion cubic meters of gas in 2023. The production capacity is expected to increase to five billion cubic meters of gas per year in 2024. This is equivalent to 7% of Italy’s gas requirement each year.

Eni expects growth in its LNG operations and is progressing to increase contracted volumes to more than 18 million tons in 2026. This is almost double from that reported in 2022. This demonstrates LNG’s position as a reliable energy source to ensure the security of supply and the energy transition.

Before Russia’s aggressive invasion of Ukraine, 40% of Italy's gas was imported from Russia. Eni expects the added capacity of the Piombino facility to help replace Russia gas by 2024-25. This advances the company’s strategy to increase energy security in Italy.

Economies across the world are gradually transitioning to cleaner energy sources. There has been a steady increase in pressure on energy companies to act on climate change on multiple fronts.

LNG is more eco-friendly than other fossil fuels and produces 30% less carbon dioxide than oil. Eni has been planning to divest its oil assets to focus on natural gas developments. Last month, the oil giant entered an agreement to divest $300 million of Congo oil assets to Perenco.

According to Eni, the assets are not part of its core operations. With this deal, Eni plans to shift its operations (from oil) to natural gas, which is expected to account for up to 60% of the group's hydrocarbon output by 2030.

Price Performance

Shares of Eni have outperformed the industry in the past year. The stock has gained 30.5% compared with the industry’s 20.2% growth.

 

Zacks Investment Research
Image Source: Zacks Investment Research

 

Zacks Rank & Stocks to Consider

Eni currently carries a Zack Rank #4 (Sell).

Some better-ranked players in the energy space are Cheniere Energy Partners, L.P. (CQP - Free Report) , Oceaneering International, Inc. (OII - Free Report)  and Seadrill Limited (SDRL - Free Report) , currently sporting a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Cheniere Partners has a stable business model, backed by long-term take-or-pay contracts with investment-grade off-takers. CQP recorded first-quarter 2023 earnings per unit of $1.43, beating the Zacks Consensus Estimate of 70 cents.

Cheniere Partners has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 30 days. The consensus estimate for CQP’s 2023 and 2024 earnings per share is pegged at $2.93 and $3.50, respectively.

One of the leading suppliers of integrated technology solutions, Oceaneering boasts an impressive portfolio of diversified products and services. OII has a Zacks Style Score of A for Momentum and B for Growth.

Oceaneering has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 30 days. The consensus estimate for SDRL’s 2023 and 2024 earnings per share is pegged at $1.12 and $1.29, respectively.

Seadrill is a market-leading international driller with strong exposure in key strategic basins like the U.S. Gulf of Mexico, Brazil and Angola. SDRL reported first-quarter 2023 earnings of 83 cents per share, beating the Zacks Consensus Estimate of 55 cents.

Seadrill has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 30 days. The consensus estimate for SDRL’s 2023 and 2024 earnings per share is pegged at $2.93 and $4.01, respectively.

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