Europe's largest oil company, Royal Dutch Shell plc ( RDS.A ) has entered into a deal with the British government. Per the agreement, Shell will head the Peterhead, Scotland-based Carbon Capture and Storage (CCS) project. The company will facilitate the transition of the project to the next phase of in-depth design work.
The primary plan of the Peterhead CCS development is to capture roughly 10 million tons of carbon dioxide from a gas power station over a period of 10 years. SSE plc, an electric utility firm, is the owner of the existing gas power station in Aberdeenshire. Shell added that the project is expected to generate sufficient clean energy, which will be able to power roughly 500,000 homes every year. The captured carbon dioxide will likely be stored under the North Sea.
Shell reveals that the design work at the CCS development is expected to be over by 2015. Post completion, Shell and the U.K government will decide on the final investment. Shell added that the development work will continue till the end of the decade, if it finds the project feasible along with the receipt of all the associated permits.
If successful in fulfilling the necessary criteria, Shell will implement the CCS technology at a gas power station for the first time in history.
Shell, an integrated energy firm, currently retains a Zacks Rank #4 (Sell), implying that it is expected to underperform the broader U.S. equity market over the next one to three months.
Meanwhile, one can look at better-ranked players in the energy sector like Matador Resources Company ( MTDR ), Patterson-UTI Energy Inc. ( PTEN ) and Helmerich & Payne Inc. ( HP ). All the stocks sport a Zacks Rank #1 (Strong Buy).