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Chevron Seeks Collaboration to Spur Australian LNG Boom

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Chevron Corporation (CVX - Free Report) , in a bid to unleash an LNG wave in Australia, is reportedly seeking greater collaboration from the government and the industry players, to develop the continent’s offshore oil and gas resources.

The company is likely to team up with Woodside Petroleum Limited and Royal Dutch Shell plc . Chevron views such collaboration to be essential for the future development of the offshore resources in an efficient manner, as it would result in cost effectiveness and minimum duplication of its infrastructure.

Chevron Australia Managing Director recently proposed a pipeline system, Trans Carnarvon Basin Trunkline, to unlock the future value in the Carnarvon Basin, offshore Western Australia. The multi-user offshore pipeline underpinned by shared offshore infrastructure would serve as the interconnected gas gathering system, spanning the width of the Carnarvon Basin.

It would help connect remote accumulations such as Scarborough, Thebe and the Exmouth fields, to existing gas facilities such as the North-West Shelf, Pluto and Wheatstone, thereby enabling the smooth flow of gas from the offshore fields to where it is processed.

The project is likely to spur the development of various fields that are currently not much economically viable and thereby uplift the resource potential of Australia. This will lead to greater volumes of gas to the shore, boosting local economies and Australian government revenues. The shared infrastructure is likely to mitigate duplication of pipeline infrastructure and hence, would keep in control the industry’s environmental footprint.

Zacks Rank and Key Picks

Chevron currently carries a Zacks Rank #3 (Hold).

Some better-ranked players in the same industry include Eni SpA (E - Free Report) and BP plc (BP - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Eni and BP delivered a positive earnings surprise of 79.55% and 29.58%, respectively, in the trailing four quarters.

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