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Shell (SHEL) Secures Long-Term LNG Supply Deal With Morocco
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Shell plc (SHEL - Free Report) signs a momentous 12-year deal with Morocco’s National Office of Electricity and Drinking Water (ONEE) to supply liquefied natural gas (LNG) to the country. This agreement is set to boost Morocco's energy mix and support the nation's transition toward low-carbon economy.
Let's discuss the details of this groundbreaking agreement and its implications for both Shell and Morocco.
Details of the LNG Agreement
Per the terms of the deal, Shell will supply 0.5 billion cubic meters (bcm) of LNG per year to Morocco. The financial aspects of the deal have not been disclosed, according to a statement released by Morocco's energy ministry. The gas will be transported from Spanish ports through a pipeline connecting the two countries. This arrangement will continue until Morocco constructs its own LNG terminals, as stated by the ministry.
Benefits for Morocco's Energy Sector
This strategic collaboration between Shell and Morocco's ONEE will have numerous benefits for the country's energy sector. It will enable ONEE to operate two power stations located in northern and eastern Morocco.
Previously, these power stations relied on Algerian gas transported via the same pipeline. However, Algeria made a unilateral decision in 2021 to cease gas supply to Spain via Morocco. In response, Morocco planned to reverse the flow and import LNG from Spanish terminals instead.
By increasing the share of gas in its electricity mix, Morocco aims to meet its low-carbon goals. Renewable energy accounted for 18% of the country's total electricity production last year, gas only 1.6% and coal the remaining 72%.
By March 2023, the country had made significant progress with renewables constituting 40% of the nation’s installed capacity. Morocco plans to further increase its renewable energy capacity to 52% by 2030.
Advantages for Shell
By supplying LNG to Morocco, Shell will be able to reinforce its position as a major player in the global energy market. Furthermore, the collaboration aligns with Shell's commitment to transitioning toward cleaner energy sources and supporting countries in their low-carbon goals. The agreement boosts SHEL’s portfolio and strengthens its reputation as a reliable and forward-thinking energy provider.
Morocco's Energy Security and Competitiveness
The nation's reliance on diverse energy sources, including LNG, reduces its vulnerability to potential disruptions in a single energy supply channel. This diversification strategy enhances the stability of Morocco's energy market and promotes its competitiveness in the global arena.
Additionally, the LNG supply agreement aligns with the country’s decarbonization strategy. Morocco aims to reduce its carbon footprint and mitigate the impact of climate change. By transitioning to cleaner energy sources such as LNG and renewable energy, the nation reinforces its commitment to sustainable development and creates a more environmentally friendly energy landscape.
Conclusion
The collaboration between SHEL and Morocco enhances the latter’s energy security, diversifies its energy mix, and promotes a more sustainable and competitive energy sector. As the partners continue their efforts toward a greener future, this collaboration sets a remarkable example for the global energy industry.
Evolution Petroleum is worth approximately $264.82 million. EPM currently pays a dividend of 48 cents per share, or 6.03% on an annual basis.
The company currently has a forward P/E ratio of 7.37. In comparison, its industry has an average forward P/E of 10.60, which means EPM is trading at a discount to the group.
Murphy USA is valued at around $6.75 billion. In the past year, its shares have risen 15.2%.
MUSA currently pays a dividend of $1.52 per share, or 0.49% on an annual basis. Its payout ratio currently sits at 6% of earnings.
NGL Energy Partners is valued at around $502.64 million. In the past year, its units have risen 164.6%.
The partnership currently has a forward P/E ratio of 4.38. In comparison, its industry has an average forward P/E of 14.10, which means NGL is trading at a discount to the group.
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Shell (SHEL) Secures Long-Term LNG Supply Deal With Morocco
Shell plc (SHEL - Free Report) signs a momentous 12-year deal with Morocco’s National Office of Electricity and Drinking Water (ONEE) to supply liquefied natural gas (LNG) to the country. This agreement is set to boost Morocco's energy mix and support the nation's transition toward low-carbon economy.
Let's discuss the details of this groundbreaking agreement and its implications for both Shell and Morocco.
Details of the LNG Agreement
Per the terms of the deal, Shell will supply 0.5 billion cubic meters (bcm) of LNG per year to Morocco. The financial aspects of the deal have not been disclosed, according to a statement released by Morocco's energy ministry. The gas will be transported from Spanish ports through a pipeline connecting the two countries. This arrangement will continue until Morocco constructs its own LNG terminals, as stated by the ministry.
Benefits for Morocco's Energy Sector
This strategic collaboration between Shell and Morocco's ONEE will have numerous benefits for the country's energy sector. It will enable ONEE to operate two power stations located in northern and eastern Morocco.
Previously, these power stations relied on Algerian gas transported via the same pipeline. However, Algeria made a unilateral decision in 2021 to cease gas supply to Spain via Morocco. In response, Morocco planned to reverse the flow and import LNG from Spanish terminals instead.
By increasing the share of gas in its electricity mix, Morocco aims to meet its low-carbon goals. Renewable energy accounted for 18% of the country's total electricity production last year, gas only 1.6% and coal the remaining 72%.
By March 2023, the country had made significant progress with renewables constituting 40% of the nation’s installed capacity. Morocco plans to further increase its renewable energy capacity to 52% by 2030.
Advantages for Shell
By supplying LNG to Morocco, Shell will be able to reinforce its position as a major player in the global energy market. Furthermore, the collaboration aligns with Shell's commitment to transitioning toward cleaner energy sources and supporting countries in their low-carbon goals. The agreement boosts SHEL’s portfolio and strengthens its reputation as a reliable and forward-thinking energy provider.
Morocco's Energy Security and Competitiveness
The nation's reliance on diverse energy sources, including LNG, reduces its vulnerability to potential disruptions in a single energy supply channel. This diversification strategy enhances the stability of Morocco's energy market and promotes its competitiveness in the global arena.
Additionally, the LNG supply agreement aligns with the country’s decarbonization strategy. Morocco aims to reduce its carbon footprint and mitigate the impact of climate change. By transitioning to cleaner energy sources such as LNG and renewable energy, the nation reinforces its commitment to sustainable development and creates a more environmentally friendly energy landscape.
Conclusion
The collaboration between SHEL and Morocco enhances the latter’s energy security, diversifies its energy mix, and promotes a more sustainable and competitive energy sector. As the partners continue their efforts toward a greener future, this collaboration sets a remarkable example for the global energy industry.
Zacks Rank and Key Picks
Currently, SHEL carries a Zacks Rank #3 (Buy).
Some better-ranked stocks for investors interested in the energy sector are Evolution Petroleum (EPM - Free Report) , sporting a Zacks Rank #1 (Strong Buy), and Murphy USA (MUSA - Free Report) and NGL Energy Partners (NGL - Free Report) , both carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Evolution Petroleum is worth approximately $264.82 million. EPM currently pays a dividend of 48 cents per share, or 6.03% on an annual basis.
The company currently has a forward P/E ratio of 7.37. In comparison, its industry has an average forward P/E of 10.60, which means EPM is trading at a discount to the group.
Murphy USA is valued at around $6.75 billion. In the past year, its shares have risen 15.2%.
MUSA currently pays a dividend of $1.52 per share, or 0.49% on an annual basis. Its payout ratio currently sits at 6% of earnings.
NGL Energy Partners is valued at around $502.64 million. In the past year, its units have risen 164.6%.
The partnership currently has a forward P/E ratio of 4.38. In comparison, its industry has an average forward P/E of 14.10, which means NGL is trading at a discount to the group.