Exxon Mobil Corporation (XOM) is forging ahead of its peers in bolstering its liquefied natural gas (LNG) portfolio, according to a recent Reuters report.
Targeting a capacity hike to 40 million tons per annum (Mtpa) by 2030 from the current production of nearly 30 Mtpa, ExxonMobil’s stride signifies a notable departure from its 2020 strategy, underlining a shift towards self-sufficiency in LNG trading.
Strategic Maneuvers
In contrast to competitors like TotalEnergies (TTE) and Shell plc (SHEL) who are reaping substantial dividends from LNG trading, ExxonMobil reported a $2.4 billion income surplus from this sector in the fourth quarter of 2023.
The company’s concerted focus on trading its gas rather than relying on external sources is dictated by the premium profit margins it envisions in managing its production and sales, diverging from the narrower margins observed in third-party gas trading.
Focused Expansion Plans
The cornerstone of ExxonMobil’s LNG agenda revolves around its stake in the Golden Pass LNG project, a collaboration with QatarEnergies boasting an export capacity of approximately 18 Mtpa, slated to commence production in 2025.
Additionally, progress is underway for the final investment decision on its PNG Papua LNG project in Papua New Guinea, while plans are afoot to initiate engineering and design for a venture in Mozambique by late 2024.
These strides are integral to ExxonMobil’s blueprint for capturing the Asian market, projected to account for 75% of global energy demand by 2050. Through strategic investments and a relentless commitment to optimizing its LNG assets, ExxonMobil aims to establish a preeminent and financially resilient LNG portfolio to meet the escalating energy requisites of the Asia Pacific region.
Price Performance and Future Outlook
ExxonMobil shares have outshone the industry over the past three months, with a 11.9% growth compared to the industry’s 6.3% upturn.
Image Source: Zacks Investment Research
Zacks Rankings and Investment Recommendations
Currently holding a Zacks Rank #3 (Hold), ExxonMobil presents an interesting proposition for investors in the energy sector.
For those seeking potentially superior options, consider exploring Global Partners (GLP), a leading operator of gasoline stations and convenience stores. With recent upward earnings estimate revisions for 2024 and 2025, GLP exhibits a promising trajectory.
Projections for Global Partners’ 2024 and 2025 earnings per share stand at $3.90 and $4.47, respectively, with GLP currently flaunting a Zacks Style Score of A for Value.
