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Chevron Reveals Plans to Build $5B Blue Hydrogen Plant in Port Arthur
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Key Takeaways
Chevron plans to build a $5B blue hydrogen and ammonia plant in Port Arthur, Texas.
CVX is pursuing HyVelocity Hub funding and 45V clean hydrogen production tax credits to lower project costs.
Project Labrador aims to begin in 2027 and meet the 2028 deadline for 45V hydrogen tax credits.
Chevron Corporation (CVX - Free Report) , a U.S.-based oil and gas giant, is reportedly planning to construct a huge blue hydrogen and ammonia plant in Port Arthur, TX. The company has made the necessary filings for tax abatements to support the construction of this plant. The investment associated with this large-scale blue hydrogen and ammonia plant is nearly $5 billion.
Apart from tax benefits, Chevron is also seeking funding for the project through the HyVelocity Hub initiative. This initiative, which is federally funded, is expected to reduce the total CVX investment in this low-carbon energy project. Chevron's development, named Project Labrador, is expected to start construction in 2027. The plant is slated to begin commercial operations in 2032.
The project could qualify for tax exemptions, provided the construction begins as per schedule. Chevron is targeting the 10-year 45V clean hydrogen production tax credit, which has an expiration date of Jan. 1, 2028. If the development of Project Labrador proceeds on time, it could meet the deadline to access this valuable incentive. The 45V clean hydrogen production tax credit should provide up to $3 per kilogram of clean hydrogen produced for 10 years.
The construction of this blue hydrogen and ammonia plant in Port Arthur underscores Chevron's commitment to low-carbon energy projects in the United States. CVX has made the required filings that enable it to utilize the tax incentives to reduce the costs associated with the construction of this low-carbon hydrogen facility. By leveraging federal funding through the HyVelocity Hub and available tax policy benefits, Chevron aims to improve the financial feasibility of Project Labrador.
CVX’s Zacks Rank & Key Picks
CVX currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the energy sector are Flotek Industries Inc. (FTK - Free Report) , The Williams Companies, Inc. (WMB - Free Report) and Oceaneering International (OII - Free Report) . While Flotek Industries sports a Zacks Rank #1 (Strong Buy) at present, The Williams Companies and Oceaneering International carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Flotek Industries specializes in green chemistry, which provides innovative solutions aimed at reducing the environmental impact of the energy industry. The company develops specialty chemicals tailored for both domestic and international energy producers, as well as oilfield service companies. These chemicals not only help reduce the environmental impact of hydrocarbon production but also lower operational costs.
The Williams Companies, Inc. is a premier energy infrastructure provider in North America. The company’s core operations include finding, producing, gathering, processing and transporting natural gas and natural gas liquids. Williams boasts a pipeline system of more than 33,000 miles and is one of the largest domestic transporters of natural gas.
Oceaneering International delivers integrated technology solutions across all stages of the offshore oilfield lifecycle. The company is a leading provider of offshore equipment and technology solutions to the energy industry. OII’s proven ability to deliver innovative, integrated solutions supports ongoing client retention and new business opportunities, ensuring steady revenue growth.
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Chevron Reveals Plans to Build $5B Blue Hydrogen Plant in Port Arthur
Key Takeaways
Chevron Corporation (CVX - Free Report) , a U.S.-based oil and gas giant, is reportedly planning to construct a huge blue hydrogen and ammonia plant in Port Arthur, TX. The company has made the necessary filings for tax abatements to support the construction of this plant. The investment associated with this large-scale blue hydrogen and ammonia plant is nearly $5 billion.
Apart from tax benefits, Chevron is also seeking funding for the project through the HyVelocity Hub initiative. This initiative, which is federally funded, is expected to reduce the total CVX investment in this low-carbon energy project. Chevron's development, named Project Labrador, is expected to start construction in 2027. The plant is slated to begin commercial operations in 2032.
The project could qualify for tax exemptions, provided the construction begins as per schedule. Chevron is targeting the 10-year 45V clean hydrogen production tax credit, which has an expiration date of Jan. 1, 2028. If the development of Project Labrador proceeds on time, it could meet the deadline to access this valuable incentive. The 45V clean hydrogen production tax credit should provide up to $3 per kilogram of clean hydrogen produced for 10 years.
The construction of this blue hydrogen and ammonia plant in Port Arthur underscores Chevron's commitment to low-carbon energy projects in the United States. CVX has made the required filings that enable it to utilize the tax incentives to reduce the costs associated with the construction of this low-carbon hydrogen facility. By leveraging federal funding through the HyVelocity Hub and available tax policy benefits, Chevron aims to improve the financial feasibility of Project Labrador.
CVX’s Zacks Rank & Key Picks
CVX currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the energy sector are Flotek Industries Inc. (FTK - Free Report) , The Williams Companies, Inc. (WMB - Free Report) and Oceaneering International (OII - Free Report) . While Flotek Industries sports a Zacks Rank #1 (Strong Buy) at present, The Williams Companies and Oceaneering International carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Flotek Industries specializes in green chemistry, which provides innovative solutions aimed at reducing the environmental impact of the energy industry. The company develops specialty chemicals tailored for both domestic and international energy producers, as well as oilfield service companies. These chemicals not only help reduce the environmental impact of hydrocarbon production but also lower operational costs.
The Williams Companies, Inc. is a premier energy infrastructure provider in North America. The company’s core operations include finding, producing, gathering, processing and transporting natural gas and natural gas liquids. Williams boasts a pipeline system of more than 33,000 miles and is one of the largest domestic transporters of natural gas.
Oceaneering International delivers integrated technology solutions across all stages of the offshore oilfield lifecycle. The company is a leading provider of offshore equipment and technology solutions to the energy industry. OII’s proven ability to deliver innovative, integrated solutions supports ongoing client retention and new business opportunities, ensuring steady revenue growth.