Exxon Mobil Corporation ( XOM Quick Quote XOM - Free Report) is expected to invest more than $240 million in the Baton Rouge refinery to make it ready for a potential expansion, per reports. Moreover, the company intends to make the site more competitive by modernizing it.
Following the improvements, the refinery is expected to process new types of crudes and reduce emissions. The final investment decision for the project is expected to come next year, which will make it ready for construction by mid-2021. The position of the refinery is comparatively disadvantageous than some of its peers. As such, the improvements will likely reduce structural disadvantages and make the refinery more competitive.
Following the improvement works, the facility is expected to efficiently handle Permian Basin crude oil and Canadian oil sands crude. It will also incorporate a new mooring system, which will allow larger ships to carry the export products. Emissions from volatile organic compounds will likely decrease 10% at the Baton Rouge refinery. The refinery will likely witness significant cost reduction owing to the usage of new technology. The leading integrated energy company recently chalked out a new plan to lower greenhouse gas emissions over the next five years.
The modernization of the refinery will likely generate 600 construction jobs per annum through the 2021-2023 period. Moreover, ExxonMobil is expected to retain the existing 1,300 jobs at the site. In 2021, the company will likely generate $5 million in sales taxes. The plant has been refining crude oil since 1909. It can process 517 thousand barrels of crude oil per day.
Importantly, the coronavirus pandemic caused significant energy demand destruction for the most part of 2020. However, the situation has improved amid vaccine rollouts and stimulus talks. Bullish energy vision is expected to lead to a massive recovery in refined products demand in 2021, which might play a major role in the decision-making process regarding the investment plan.
ExxonMobil has gained 17.5% in the past three months compared with 21.8% rise of the
industry it belongs to. Zacks Rank & Other Key Picks
The company currently has a Zacks Rank #1 (Strong Buy). You can see
the complete list of today’s Zacks #1 Rank stocks here .
Other top-ranked players in the energy space include
Covanta Holding Corporation ( CVA Quick Quote CVA - Free Report) , Ameresco, Inc. ( AMRC Quick Quote AMRC - Free Report) and Canadian Natural Resources Limited ( CNQ Quick Quote CNQ - Free Report) , each holding a Zacks Rank #2 (Buy).
Covanta Holding’s bottom line for 2021 is expected to rise 93% year over year.
Ameresco’s bottom line for 2021 is expected to rise 18.8% year over year.
Canadian Natural Resources’ sales for 2021 are expected to rise 18% year over year.
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