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Exxon (XOM) to Invest $400M in LaBarge CCS Expansion Project

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Exxon Mobil Corporation (XOM - Free Report)  announced plans to invest $400 million for the expansion of its carbon capture and storage (“CCS”) facility in LaBarge, WY.

The move comes as the company is facing immense pressure from investors and environmentalists to accelerate its climate strategy. Hence, it is focusing on short-term goals to reduce emissions and invest in low-carbon technologies.

CCS is a key technology to address carbon dioxide (CO2) emissions.  Exxon expects the expansion project to capture up to 1 million metric tons of CO2 per year in addition to the 6-7 million metric tons already being captured at the facility. Moreover, LaBarge is a leading source of helium and produces about 20% of the global supply.

In February 2021, Exxon created its Low Carbon Solutions business to commercialize low-emission technologies, which enables large-scale emission reductions. The company planned to invest $3 billion in low-emission energy solutions through 2025. By 2025, it plans to reduce the intensity of its oilfield greenhouse-gas emissions by 15-20% from 2016 reported levels.

The company is currently evaluating several large-scale CCS projects in the U.S. Gulf Coast, Europe and Asia. Beside this, it is planning to invest in biofuels and hydrogen to bring its lower-emission energy technologies to scale for the highest emitting sectors of the global economy.

At present, the LaBarge facility represents nearly 20% of the CO2 captured globally per year. The LaBarge expansion project, which would be the latest in a series of expansions at the site, highlights the company’s aim to advance CCS projects throughout the world. Exxon expects a final investment decision for the expansion project in 2022, with operations likely to start as early as 2025.

Company Profile

Headquartered in Irving, TX, Exxon is one of the leading integrated energy companies in the world.

Zacks Rank & Other Stocks to Consider

The company currently flaunts a Zack Rank #1 (Strong Buy).

Some other top-ranked players in the energy space are SM Energy Company (SM - Free Report) , Suncor Energy Inc. (SU - Free Report) and Royal Dutch Shell plc (RDS.A - Free Report) , each currently sporting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

SM Energy’s earnings for 2021 are expected to surge 838.4%year over year.

Suncor’s earnings for 2021 are expected to rise 38.4% year over year.

Shell’s earnings for 2021 are expected to increase 21.2% year over year.

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