Energy giant, ExxonMobil Corporation (XOM - Free Report) , has inked an agreement with Qatar Petroleum International to proceed with the construction of a natural gas export terminal in Texas, valued at $10 billion, as per Bloomberg reports.
Golden Pass Products LLC, a subsidiary formed by the two companies, had mentioned through an email that the project will entail setting up of liquefaction equipment at an existing import facility in Sabine Pass, Texas.
Last year, the subsidiary had received regulatory approval to export the fuel to nations having free-trade agreements with the U.S., while the approval for shipment of fuel to other countries is still pending.
Per the statement, ExxonMobil and state-owned Qatar Petroleum intend to export around 15.6 million metric tons of gas per year from the Golden Pass facility. A boom in the U.S. gas yield has encouraged many to come up with numerous proposals to transport the fuel. To facilitate shipment, the fuel is cooled to liquid form at -260 degrees Fahrenheit (-162 Celsius), for volume management.
This agreement opens up a competitive commercial proposal for Golden Pass Products that assures of building on the distinctive combined strengths of Qatar Petroleum and ExxonMobil through the global downstream liquefied natural gas (LNG) value chain.
For the last few years, ExxonMobil has been working toward expanding its worldwide gas portfolio. The investments made by the company include the 2010 purchase of XTO Energy in the U.S. and funding of A$52 billion ($52 billion) for the Gorgon LNG complex in Australia. Natural gas formed 50% of the total yield during the first quarter of 2013.
ExxonMobil holds a Zacks Rank #3, which is equivalent to a short-term Hold rating. However, there are other stocks in the oil and gas industry like Dawson Geophysical Company (DWSN - Free Report) , SM Energy Company (SM - Free Report) and Exterran Holdings, Inc. that appear more attractive in the short term. All three stocks carry a Zacks Rank #1 (Strong Buy).