Royal Dutch Shell plc (RDS.A - Free Report) recently inked a deal with Hungary whereby it will supply 250 million cubic metres of liquefied natural gas (LNG) annually for six years to the country. The gas will be delivered through an LNG terminal on the island of Krk in Croatia. The terminal is planned to commence operations in the next few months.
This is the first time that Hungary entered into a long-term gas supply pact with a Western energy company. As a bold attempt in the country’s energy diversification, the country will obtain 10% of its gas supply from the West.
By and large, Hungary has been dependent on Russia for its gas supply and has never been in any long-standing supply agreement with any gas seller except Russia’s Gazprom.
Gazprom Export signed four long-term contracts with the Hungarian gas importer Panrusgas for a total of 4.2 billion cubic meters per year. Of the four, two contracts ended last year while the remaining two are scheduled to conclude next year.
Notably, Hungary settled on a 6.2-billion cubic metre pact with Gazprom and is intended to have a flexible long-term agreement with the company.
Headquartered in the Netherlands, Shell is one of the largest integrated energy companies and is engaged in production, refining, distribution and marketing of oil and natural gas. The company has been an offshore pioneer in the Gulf of Mexico for more than 40 years and achieved some remarkable technological milestones in the design, construction and operation of world-class oil and gas producing assets. At present, the company operates nine deep water production hubs, several subsea production systems and one of the largest contracted drilling rig fleets in the gulf region.
Zacks Rank & Other Key Picks
Shell currently carries a Zacks Rank #2 (Buy). Other top-ranked players in the same space include Murphy USA Inc. (MUSA - Free Report) , CNOOC Limited (CEO - Free Report) and SilverBow Resources Inc. (SBOW - Free Report) , each presently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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