Last Tuesday, integrated energy behemoth,
) Australian units entered into a sales and purchase contract
with Tohoku Electric Power Company Inc, an electric utility firm
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Per the deal, Chevron's subsidiaries will provide roughly 0.9
million tonnes of liquefied natural gas (LNG) annually from
Chevron's Wheatstone LNG project for a period of 20 years. The
Western Australia-based Wheatstone development is worth $29
billion and is believed to start operation by 2016. The initial
phase of the project includes the construction of two processing
units, known as trains, will have total capacity of 8.9 million
tons of LNG a year along with a domestic gas plant.
Chevron acts as the operator of the project with about 64.1%
ownerships. U.S. energy firm
) and integrated energy giant,
Royal Dutch Shell plc
) hold 13.0% and 6.4% interests, respectively.
Chevron reveals that roughly 80% of the feed gas that will be
supplied to the Wheatstone project is expected to come from
Wheatstone and Iago, an offshore gas field. Chevron has roughly
80.17% ownership in the field.
Chevron has contracted 85% of its share of Wheatstone LNG project
output to Asian customers. Management believes that once the
Wheatstone development comes online, Chevron will be able to
serve natural gas' growing demand in the Asia-Pacific region.
However, the news - which was announced an hour before the
markets closed on Tuesday - had little impact on the company's
stock price. By close of trade on Wednesday, Chevron settled at
$120.83 per share, marginally 0.4% lower from last day.
San Ramon, Calif.-based Chevron currently holds a Zacks Rank #3
(Hold), implying that it is expected to perform in line with the
broader U.S. equity market over the next one to three
Meanwhile, one can look at better performing energy firms like
Stone Energy Corp.
) that offers value. The stock sports a Zacks Rank #1 (Strong