Exxon Mobil Corporation (XOM - Free Report) along with British energy major BP plc (BP - Free Report) recently signed an agreement with Alaska Gasline Development Corp (“AGDC”) with the goal of advancing the Alaska liquefied natural gas (“LNG”) project. The agreement enables the companies to look for ways that can improve the competitiveness of the LNG Project and successfully commercialize it.
The energy regulators of the United States recently set back the expected date of taking a decision on the project from February to Jun 4. The companies are planning to collaborate on the $43.4-billion project in order to progress with the authorisation process from the Federal Energy Regulatory Commission (“FERC”).
Earlier, subsidiaries of ExxonMobil and BP, along with an affiliate of ConocoPhillips (COP - Free Report) were in control of the LNG project until AGDC took over in 2016. Over the 2013-2016 time period, the companies collectively spent $600 million on the project for front-end engineering and design works. However, the companies withdrew from the project at that time due to lack of economic viability. Currently, both ExxonMobil and BP have strong foothold in the region and produce massive amount of oil.
The project is expected to liquefy 3.5 billion cubic feet of gas per day, which will be shipped to clients in the Asia-Pacific region. A three-train liquefaction facility will be built in Nikiski, a census-designated place in Kenai Peninsula Borough of Alaska. The project incorporates a 1.1-meter diameter pipeline of 807 miles from the Alaska North Slope. Once completed, the project is expected to export up to 20 million metric tons of LNG per year.
AGDC is currently in the process of negotiation with several other companies that are interested in the LNG project, including a joint venture that comprises energy giant China Petroleum & Chemical Corporation (SNP - Free Report) or Sinopec.
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Irving, TX-based ExxonMobil has gained 6.1% in the past year against 0.3% collective decline of the industry it belongs to. The company currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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