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Eni (E) Signs Deal to Increase Natural Gas Imports to Italy

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Eni SPA (E - Free Report) entered an agreement with Algeria-based energy company Sonatrach to increase natural gas imports to Italy via the Enrico Mattei (TransMed) pipeline system.

The agreement is covered under a long-term gas supply contract, expected to take effect from September 2022.

Italy imports about 40% of its natural gas from Russia. The country has been struggling to diversify its energy supply mix due to the escalating tensions over the Russia-Ukraine conflict.

The Transmed pipeline system has a daily capacity of more than 110 million cubic meters. At present, it transports only 60 million cubic meters. The latest agreement will help utilize the pipeline’s available transportation capacities to increase supply flexibility. It will increase natural gas volumes from 2022, with up to 9 billion cubic meters annually in 2023-24.

Russia’s invasion of Ukraine has triggered sweeping Western-led sanctions, which are likely to disrupt energy flows and increase the fear of gas shortages. The latest agreement has come when Europe plans to increase its gas supplies and secure its energy policies amid the Russia-Ukraine conflict.

Eni has been contributing to Algeria’s growth since 1981, with an equity production of 100,000 barrels of oil equivalent per day in the country. Notably, the company’s unique fast track model offers a significant production potential for the Algerian fields.

The agreement highlights the strong relationship between the companies and their efforts in renewables as well as exploring and producing hydrocarbons. Apart from its exploration and development program, Eni is seeking opportunities in renewables, hydrogen, carbon capture, use and storage, and bio-refining to achieve carbon neutrality by 2050.

Company Profile & Price Performance

Headquartered in Rome, Italy, Eni is one of the leading integrated energy players in the world.

Shares of Eni have outperformed the industry in the past month. The stock has gained 5.7% compared with the industry’s growth of 3%.

 

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Zacks Rank & Other Stocks to Consider

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

Investors interested in the energy sector can take a look at the following companies that also presently sport a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Houston, TX-based Occidental Petroleum (OXY - Free Report) is an integrated oil and gas company, with significant exploration and production exposure. OXY’s 2021-end proved reserves were 3.51 billion barrels of oil equivalent (Bboe), up 2.9 Bboe at the 2020-end.

OXY’s earnings for 2021 are expected to soar 212.2% year over year. As of Dec 31, 2021, Occidental had cash and cash equivalents of $2,764 million compared with $2,008 million in the corresponding period of 2020.

Matador Resources Company (MTDR - Free Report) is among the leading oil and gas explorer in shale and unconventional resources in the United States. Total proved oil and gas reserves of Matador grew 20% year over year through 2021 to 323.4 million Boe, marking an all-time high level.

Matador’s earnings for 2022 are expected to increase 89.4% year over year. The company announced a quarterly cash dividend of 5 cents per share, which doubled from the previous cash dividend of 2.5 cents initiated last year.

Imperial Oil Limited (IMO - Free Report) is one of Canada’s largest integrated oil companies of Canada, mainly engaged in oil and gas production, petroleum products refining and marketing, and the chemical business. Apart from low leverage for its industry, Imperial Oil has ample liquidity, with cash and cash equivalents of C$1.5 billion.

Imperial Oil’s earnings for 2022 are expected to increase 113% year over year. IMO remains strongly committed to returning money to investors via dividends. The company's board of directors recently approved a hike in quarterly dividend payment. The new payout of 34 Canadian cents is 26% above the prior dividend.