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ExxonMobil Seeks 3-Year Extension for Golden Pass LNG Project

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ExxonMobil Corporation (XOM - Free Report) and QatarEnergy have requested a three-year extension from U.S. regulators to complete the construction of the $10-billion Golden Pass liquefied natural gas (LNG) export project on the Texas coast. The extension appeal, submitted to the Federal Energy Regulatory Commission (“FERC”), is intended to accommodate scheduling uncertainties and a change in primary contractors, per a Reuters report. The project, originally slated for completion by November 2026, is now set to be accomplished by 2029.

The developers recently announced that the project's startup would be delayed until late next year, citing contractor changes as a key reason for the extension. The primary contractor, Zachry Industrial, filed for bankruptcy in May following a dispute over $2.4 billion in cost overruns. As a result, Golden Pass LNG appointed CB&I, a unit of McDermott International, as the new lead contractor.

Golden Pass LNG is designed to produce 18 million metric tons of LNG annually. The company remains focused on producing its first LNG by the end of 2025, with full commercial operations expected to follow soon after that. According to the report, the requested extensions are meant to provide contingencies for potential delays, such as severe weather or hurricane conditions that could make it unsafe for crews on-site.

QatarEnergy holds a 70% stake in the joint venture, while ExxonMobil owns the remaining 30%. The extension should also allow rehiring and remobilization of more than 4,000 skilled workers for the project.

The construction progress of the LNG export project includes approximately 83% completion of the first gas-processing unit, with the second and third units at 46% and 31% completion, respectively. With the extension request, ExxonMobil and QatarEnergy aim to ensure the successful completion of the Golden Pass LNG project, which is poised to play a significant role in the U.S. LNG export market upon its eventual startup.

XOM’s Zacks Rank & Key Picks

ExxonMobil currently carries a Zack Rank #5 (Strong Sell).

Investors interested in the energy sector may look at some better-ranked stocks like Precision Drilling Corporation (PDS - Free Report) , MPLX LP (MPLX - Free Report) and TechnipFMC plc (FTI - Free Report) . While Precision Drilling currently sports a Zacks Rank #1 (Strong Buy), MPLX and TechnipFMC carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

Precision Drilling is an oilfield services company. The company provides contract drilling, well servicing and strategic support services to the oil and gas industry in North America and internationally. It provides land drilling, directional drilling, turnkey drilling, camp and catering services, and procures and distributes oilfield supplies. 

The Zacks Consensus Estimate for PDS’ 2024 EPS is pegged at $6.59. 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 30 days.

MPLX derives stable fee-based revenues from long-term contracts, with minimal exposure to commodity-price fluctuations. The partnership’s robust capital expenditure forecast for 2024, along with significant expansion initiatives, underscores its commitment to sustainable growth.

The Zacks Consensus Estimate for MPLX’s 2024 EPS is pegged at $4.29. 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.

TechnipFMC is a leading manufacturer and supplier of products, services and fully integrated technology solutions for the energy industry, with a focus on the subsea segment in offshore basins worldwide. FTI’s growing backlog ensures strong revenue visibility and supports margin improvements.

The Zacks Consensus Estimate for FTI’s 2024 EPS is pegged at $1.34. 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 30 days.

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