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ExxonMobil (XOM) Nixes $25B LNG Export Project in Canada

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Exxon Mobil Corporation (XOM - Free Report) recently pulled back from its $25-billion liquefied natural gas (LNG) export project in western Canada from environmental assessment after thorough review of the project. Proposed in 2015, the project was expected to be built by the company and its Canadian unit, Imperial Oil Limited (IMO - Free Report) , at the north coast of British Columbia.

Canada’s LNG sector received encouraging news from Royal Dutch Shell plc and its partners in the LNG Canada project in October. The $40-billion project is expected to provide the country with its first ever LNG export terminal.

However, ExxonMobil’s latest decision is a setback for the sector, which once received 20 proposals but now has only one confirmed project.

With countries looking for cleaner energy sources, global LNG demand is anticipated to rise 100% to 550 million tons per annum (mtpa) by 2030, majority of which is expected to come from the northeast Asia. The West Coast Canada (WCC) LNG export project of ExxonMobil, with proposed capacity of 15 mtpa, was supposed to address this rising demand for LNG. The project also had plans for capacity expansion up to 30 mtpa.

Notably, in order to boost LNG business, ExxonMobil has several other focus areas like its projects with Qatar Petroleum and the proposed expansion project in Papua New Guinea LNG operations. The company has planned an aggressive exploration program for developing the resources in Papua New Guinea. Moreover, the acquisition of InterOil gave ExxonMobil high-quality and low-cost resources in the region.

Price Performance

ExxonMobil has lost 18.9% in the past year compared with 14.1% collective decline of the industry it belongs to.

Zacks Rank and Stocks to Consider

The company currently has a Zacks Rank #3 (Hold). Investors interested in the energy sector can opt for some better-ranked stocks as given below:

Buenos Aires, Argentina-based YPF Sociedad Anonima (YPF - Free Report) is an integrated energy company. Its bottom-line growth for the full year of 2018 is anticipated at more than 27% year over year. It currently has a Zack Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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