CNOOC Limited (CEO - Free Report) recently sold its Yuedong liquefied natural gas (LNG) terminal access to the state-owned Zhenhua Oil and private logistics firm, Longkou Shengtong Energy. The move, which facilitates China to liberalize its huge energy market, came forth as a result of an auction on the Shanghai Petroleum and Gas Exchange.
Per reports, Zhenhua Oil and Longkou will pay ¥0.265 (4 cents) to CNOOC for every cubic meter of LNG imported through the terminal. The deal is expected to be valued at ¥26.5 million (around $3.9 million). Zhenhua Oil, a unit of Chinese defense conglomerate Norinco, has revealed its intention to import 100 million cubic meters of LNG to Yuedong in late October.
Notably, the deal marks CNOOC’s first auction of its access to import infrastructures, which gave the companies equal right to bid. It is the largest LNG importing company in the country, with nine LNG terminals that have a combined capacity of 33.8 million metric tons.
The move marks a huge success for China, one of the largest energy importers. Demand for LNG in the country is on rise, as it has shifted its focus from coal to cleaner energy sources in a bid to reduce air pollution. Last winter, the country witnessed a boom in LNG demand. Infact in 2017, China’s LNG imports surged 46% from 2016 to 38 million tons.
Based in Central, Hong Kong, CNOOC has gained 48.8% in the past year compared with 31.2% collective growth of its industry.
Zacks Rank & Stocks to Consider
Currently, CNOOC has a Zacks Rank #4 (Sell). Investors interested in the Oil and Gas sector can opt for some better-ranked stocks like Petroleo Brasileiro S.A. or Petrobras (PBR - Free Report) , TC PipeLines, LP (TCP - Free Report) and RGC Resources Inc. (RGCO - Free Report) . While Petrobras and TC PipeLines sport a Zacks Rank #1 (Strong Buy), RGC Resources has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Rio de Janeiro, Brazil-based Petrobras is an integrated energy company. The company’s top line for 2018 is likely to improve 7.5% year over year. In the last four reported quarters, it delivered an average positive earnings surprise of 10.4%.
Houston, TX-based TC PipeLines is a midstream energy firm. Its bottom line for 2018 is likely to improve 20.6% year over year. In the last four reported quarters, the partnership delivered an average positive earnings surprise of 3.7%.
Roanoke, VA-based RGC Resources’ full-year earnings are expected to grow 5.8%. In the last reported quarter, the company delivered an earnings surprise of 40%.
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