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BP Presses FERC on Venture Global's LNG Plant Startup Delay
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BP plc (BP - Free Report) , a key customer of Venture Global LNG, has informed U.S. regulators that the LNG developer does not need additional time to officially launch its Calcasieu Pass facility, per a Reuters report. This statement came after Venture Global delayed fulfilling its long-term contracts, including those with BP, Shell, Repsol, Eni and Edison, while capitalizing on higher prices in the spot market.
The Calcasieu Pass facility, which began production in early 2022, was crucial for Europe during its emerging energy shortage. However, instead of prioritizing its contractual obligations, Venture Global sold more LNG on the spot market, citing force majeure due to technical issues with the power supply as the reason behind delayed deliveries.
In response to these delays, BP requested the Federal Energy Regulatory Commission (FERC) to ask Venture Global to disclose documentation related to the force majeure claim. FERC subsequently ordered the company to provide these documents earlier this year.
After reviewing the documents, BP reaffirmed its stance, stating that no extension is necessary for Venture Global to commence its official startup. This conclusion came after the company reviewed more than 124 weekly commissioning and site inspection reports, as well as documents related to ongoing repairs to a heat recovery steam generator, all submitted under a protective order.
The Calcasieu Pass plant is poised to significantly bolster the U.S. LNG export capacity. Once it begins full commercial production, the plant is expected to produce 20 million metric tons per annum (MTPA) of LNG, making it the second-largest exporter of super chilled gas in the United States. This would further cement the country’s position as the world’s leading LNG exporter.
While BP challenges the need for an extension, Venture Global is expanding its LNG capacity, having ordered nine new LNG vessels currently under construction in South Korea. These vessels, set to be delivered starting later this year, highlight Venture Global's ambitions to increase its sales of the super-chilled fuel as well as its commitment to meeting global energy demands.
Venture Global has not yet commented on BP’s recent statement or the delay’s broader implications for its timeline and operations.
SM Energy is set to expand its oil-centered operations in the coming years, with an increasing focus on crude oil, especially in the Permian Basin and Eagle Ford regions. The company’s attractive oil and gas investments should create long-term value for shareholders.
The Zacks Consensus Estimate for SM’s 2024 EPS is pegged at $7.53. The company has a Zacks Style Score of A for Value. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past seven days.
MPLX derives stable fee-based revenues driven by long-term contracts with minimal exposure to commodity-price fluctuations. The partnership’s robust capital expenditure forecast for 2024, with significant expansion initiatives, underscores its commitment to sustainable growth.
The Zacks Consensus Estimate for MPLX’s 2024 EPS is pegged at $4.21. The company has a Zacks Style Score of B for Value. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past seven days.
The Williams Companies is a premier energy infrastructure provider in North America. The company’s core operations include finding, producing, gathering, processing, and transporting natural gas and natural gas liquids. Boasting a widespread pipeline system of more than 33,000 miles, Williams is one of the largest domestic transporters of natural gas by volume.
The Zacks Consensus Estimate for WMB’s 2024 EPS is pegged at $1.80. The company has witnessed upward earnings estimate revisions for 2024 and 2025 in the past seven days.
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BP Presses FERC on Venture Global's LNG Plant Startup Delay
BP plc (BP - Free Report) , a key customer of Venture Global LNG, has informed U.S. regulators that the LNG developer does not need additional time to officially launch its Calcasieu Pass facility, per a Reuters report. This statement came after Venture Global delayed fulfilling its long-term contracts, including those with BP, Shell, Repsol, Eni and Edison, while capitalizing on higher prices in the spot market.
The Calcasieu Pass facility, which began production in early 2022, was crucial for Europe during its emerging energy shortage. However, instead of prioritizing its contractual obligations, Venture Global sold more LNG on the spot market, citing force majeure due to technical issues with the power supply as the reason behind delayed deliveries.
In response to these delays, BP requested the Federal Energy Regulatory Commission (FERC) to ask Venture Global to disclose documentation related to the force majeure claim. FERC subsequently ordered the company to provide these documents earlier this year.
After reviewing the documents, BP reaffirmed its stance, stating that no extension is necessary for Venture Global to commence its official startup. This conclusion came after the company reviewed more than 124 weekly commissioning and site inspection reports, as well as documents related to ongoing repairs to a heat recovery steam generator, all submitted under a protective order.
The Calcasieu Pass plant is poised to significantly bolster the U.S. LNG export capacity. Once it begins full commercial production, the plant is expected to produce 20 million metric tons per annum (MTPA) of LNG, making it the second-largest exporter of super chilled gas in the United States. This would further cement the country’s position as the world’s leading LNG exporter.
While BP challenges the need for an extension, Venture Global is expanding its LNG capacity, having ordered nine new LNG vessels currently under construction in South Korea. These vessels, set to be delivered starting later this year, highlight Venture Global's ambitions to increase its sales of the super-chilled fuel as well as its commitment to meeting global energy demands.
Venture Global has not yet commented on BP’s recent statement or the delay’s broader implications for its timeline and operations.
Zacks Rank & Key Picks
BP currently carries a Zack Rank #3 (Hold).
Investors interested in the energy sector may look at some better-ranked stocks like SM Energy Company (SM - Free Report) , MPLX LP (MPLX - Free Report) and The Williams Companies, Inc. (WMB - Free Report) . While SM Energy currently sports a Zacks Rank #1 (Strong Buy), MPLX and The Williams Companies carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
SM Energy is set to expand its oil-centered operations in the coming years, with an increasing focus on crude oil, especially in the Permian Basin and Eagle Ford regions. The company’s attractive oil and gas investments should create long-term value for shareholders.
The Zacks Consensus Estimate for SM’s 2024 EPS is pegged at $7.53. The company has a Zacks Style Score of A for Value. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past seven days.
MPLX derives stable fee-based revenues driven by long-term contracts with minimal exposure to commodity-price fluctuations. The partnership’s robust capital expenditure forecast for 2024, with significant expansion initiatives, underscores its commitment to sustainable growth.
The Zacks Consensus Estimate for MPLX’s 2024 EPS is pegged at $4.21. The company has a Zacks Style Score of B for Value. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past seven days.
The Williams Companies is a premier energy infrastructure provider in North America. The company’s core operations include finding, producing, gathering, processing, and transporting natural gas and natural gas liquids. Boasting a widespread pipeline system of more than 33,000 miles, Williams is one of the largest domestic transporters of natural gas by volume.
The Zacks Consensus Estimate for WMB’s 2024 EPS is pegged at $1.80. The company has witnessed upward earnings estimate revisions for 2024 and 2025 in the past seven days.