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ExxonMobil (XOM) Plans to Pilot CCS With CFC Technology

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Exxon Mobil Corporation (XOM - Free Report) is planning to construct a pilot facility to test a carbon capture and storage (CCS) technology developed by FuelCell Energy Inc.

The companies claim that the technology has the potential to substantially decrease CO2 emissions from crucial industries.

FuelCell’s technology can not only reduce CO2 emissions but also help in generating heat and electricity. The plant represents the first implementation of carbonate fuel cell (“CFC”) technology for carbon capture within an industrial environment.

ExxonMobil intends to construct the pilot plant at its Rotterdam Manufacturing Complex, an integrated refining and petrochemical site. The purpose of the facility is to gather data on the performance and operability of CFC technology.

The pilot project also seeks to gain deeper insight into the expenses associated with the installation and operation of a CFC plant for carbon capture. It aims to address potential technical challenges that may arise in a commercial environment.

Oil and gas firms actively engage in carbon capture and storage projects, providing a swift and efficient pathway to reduce CO2 emissions beyond alternatives like electrification and renewable fuels. This presents a valuable opportunity for reducing industrial emissions.

There is a growing recognition of the effectiveness of carbon-capture systems that store emissions underground in mitigating climate change. However, cost barriers persist. ExxonMobil plans to leverage the power generated by the FuelCell system to lower operational expenses.

CFC technology has the potential to provide cost-effective decarbonization solutions for customers across diverse industries after it is prepared for widespread deployment. Per FuelCell Energy, the technology can be applied to individual projects, with each having the capacity to capture 100,000 tons of CO2 annually.

As a prominent figure in the oil and gas sector, ExxonMobil’s engagement in CCS technology signals a strategic move toward sustainable practices. Through its investment in CCS, ExxonMobil recognizes the significance of curtailing greenhouse gas emissions and acknowledges the potential impact of this technology on its business operations.

Zacks Rank & Stocks to Consider

ExxonMobil currently carries a Zack Rank #3 (Hold).

Investors interested in the energy sector might look at the following companies that presently sport a Zacks Rank #1 (Strong Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

Murphy USA’s (MUSA - Free Report) unique high-volume, low-cost business model helps it retain high profitability, even in the fiercely competitive retail environment.

MUSA remains committed to returning excess cash to its shareholders through continued share buyback programs. As part of this initiative, the fuel retailer recently approved a repurchase authorization of up to $1.5 billion following the completion of the existing $1-billion mandate. The move underscores MUSA’s sound financial position and commitment to rewarding its shareholders.

The Williams Companies (WMB - Free Report) is a premier energy infrastructure provider in North America. WMB has a thriving deepwater transportation business. The company's deepwater portfolio includes a 3,500-mile natural gas and oil gathering and transmission pipeline and is important for future cash flows.

Williams Companies’ debt maturity profile is in good shape, with its $4.5-billion revolver maturing in 2023. It is also paying its shareholders an attractive dividend yielding around 5%. Besides this, the company has a share repurchase program worth $1.5 billion, thus highlighting its commitment to shareholders.

Ecopetrol S.A. (EC - Free Report) operates across various segments of the oil and gas industry, including exploration, development and production of oil and gas, refining, transportation and sale of petroleum products.

Ecopetrol has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 30 days. The Zacks Consensus Estimate for earnings for EC’s 2023 and 2024 earnings is pegged at $2.32 per share and $2.41 per share, respectively.

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