BP plc (BP - Free Report) has inked a binding gas sales precedent agreement with the state of Alaska. Per the terms, the company committed to sell gas to Alaska's gas line project.
Alaska's gas line project is an initiative by the Alaska Gas Development Corporation (“AGDC”) to meet higher gas demand projected in 2025. The success of the initiative depends on the support it gets from Alaska's major natural gas producers. Though the producers have shown interest in the project, BP is the first to sign such a commitment.
Per reports, the agency has finalized key terms for gas sales of pricing and volume with BP. However, details of these parameters were not disclosed. Therefore, the viability of the project cannot be determined.
BP has committed to sell its share of 30 trillion cubic feet of gas from the Prudhoe Bay and Point Thomson units. BP, the operator of Prudhoe Bay field, has an interest of 26%. It also owns 32% share in the nearby Point Thomson field. Through leases with the state, the company controls about 33% of the huge volumes of gas intended for the project.
However, other owners of the Prudhoe Bay — ExxonMobil Corporation (XOM - Free Report) and ConocoPhillips (COP - Free Report) — are also required to agree to sell their share of the gas to the project for its success. The agency will need gas supply agreements with all of the North Slope producers for the project to run at full capacity.
After receiving commitments from these oil giants, the financing of the project would become easier. The project is being evaluated by several China-owned companies for potential long-term investment. China is Alaska’s largest trading partner and projected consumer of natural gas.
The Alaska project will super-chill North Slope gas into liquefied natural gas or LNG and ship it by oceangoing tanker to Asian utilities. The project is not estimated to yield its first gas before 2023.
Price Performance
During the past three months, BP’s shares have gained 15.6% compared with the industry’s 12.2% rally.
Zacks Rank & Key Picks
BP currently carries a Zacks Rank #3 (Hold).
A better-ranked player in the same sector is Delek US Holdings, Inc (DK - Free Report) , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Delek US Holdings is a diversified energy company. The company delivered a positive earnings surprise of 25% in the preceding quarter.
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BP plc (BP - Free Report) has inked a binding gas sales precedent agreement with the state of Alaska. Per the terms, the company committed to sell gas to Alaska's gas line project.
Alaska's gas line project is an initiative by the Alaska Gas Development Corporation (“AGDC”) to meet higher gas demand projected in 2025. The success of the initiative depends on the support it gets from Alaska's major natural gas producers. Though the producers have shown interest in the project, BP is the first to sign such a commitment.
Per reports, the agency has finalized key terms for gas sales of pricing and volume with BP. However, details of these parameters were not disclosed. Therefore, the viability of the project cannot be determined.
BP has committed to sell its share of 30 trillion cubic feet of gas from the Prudhoe Bay and Point Thomson units. BP, the operator of Prudhoe Bay field, has an interest of 26%. It also owns 32% share in the nearby Point Thomson field. Through leases with the state, the company controls about 33% of the huge volumes of gas intended for the project.
However, other owners of the Prudhoe Bay — ExxonMobil Corporation (XOM - Free Report) and ConocoPhillips (COP - Free Report) — are also required to agree to sell their share of the gas to the project for its success. The agency will need gas supply agreements with all of the North Slope producers for the project to run at full capacity.
After receiving commitments from these oil giants, the financing of the project would become easier. The project is being evaluated by several China-owned companies for potential long-term investment. China is Alaska’s largest trading partner and projected consumer of natural gas.
The Alaska project will super-chill North Slope gas into liquefied natural gas or LNG and ship it by oceangoing tanker to Asian utilities. The project is not estimated to yield its first gas before 2023.
Price Performance
During the past three months, BP’s shares have gained 15.6% compared with the industry’s 12.2% rally.
Zacks Rank & Key Picks
BP currently carries a Zacks Rank #3 (Hold).
A better-ranked player in the same sector is Delek US Holdings, Inc (DK - Free Report) , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Delek US Holdings is a diversified energy company. The company delivered a positive earnings surprise of 25% in the preceding quarter.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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