Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

British energy giant BP plc (BP - Analyst Report) has inked an agreement to ship liquefied natural gas (LNG) processed at a terminal in Freeport, Texas. The agreement is for two decades.

Per the deal, BP will export 4.4 million tons per annum (mtpa). The deliveries are expected to commence in 2017, from the plant’s first unit. The liquefaction tolling agreement with BP will begin upon the completion of Freeport LNG’s second production unit or train.

In July 2012, Freeport disclosed its commitment with two Japanese companies, Osaka Gas and Chubu Electric Power, for 4.4 mtpa of LNG per year from its first train. The agreements will be operational upon the completion of construction of the units.

The construction at Freeport is subject to various approvals from the US authorities, including the consent from the Federal Energy Regulatory Commission (FERC). It also awaits clearance from the US Department of Energy (DOE) to export LNG to non-free trade agreement countries. A final investment decision is expected by the end of 2013.

Freeport has already successfully completely booked the first two liquefaction trains and therefore expects to get the construction permission to bring its project online as scheduled by 2017.

Several facilities are awaiting federal consent for natural gas exports. Till date, only one export facility from Cheniere Energy in Louisiana has been cleared by regulators.

BP’s commitment to export LNG overseas, in the current scenario holds immense potential. In the long race, wherein several companies are trying to participate in this new venture, BP’s early entry is noteworthy. This will help the company to strengthen its  relationship with the leading national energy companies.

Natural gas oversupply has resulted in rock bottom prices in the last decade and has compelled companies such as Royal Dutch Shell plc (RDS.A - Analyst Report), ExxonMobil Corporation (XOM - Analyst Report) and Total SA (TOT - Analyst Report), to ship North American production overseas.

BP holds a Zacks Rank #3, which is equivalent to a short-term Hold rating.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GRP IN DXYN 15.84 +7.90%
BOFI HLDG IN BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%