Advertisement
New Zealand markets closed
  • NZX 50

    11,864.89
    -7.75 (-0.07%)
     
  • NZD/USD

    0.6153
    -0.0018 (-0.29%)
     
  • NZD/EUR

    0.5729
    -0.0012 (-0.20%)
     
  • ALL ORDS

    7,975.70
    -26.80 (-0.33%)
     
  • ASX 200

    7,725.30
    -24.40 (-0.31%)
     
  • OIL

    78.24
    -0.38 (-0.48%)
     
  • GOLD

    2,324.60
    +6.60 (+0.28%)
     
  • NASDAQ

    19,576.92
    +111.74 (+0.57%)
     
  • FTSE

    8,163.67
    -51.81 (-0.63%)
     
  • Dow Jones

    38,647.10
    -65.11 (-0.17%)
     
  • DAX

    18,265.68
    -365.18 (-1.96%)
     
  • Hang Seng

    18,004.03
    -108.60 (-0.60%)
     
  • NIKKEI 225

    38,865.95
    +145.48 (+0.38%)
     
  • NZD/JPY

    97.1630
    +0.3430 (+0.35%)
     

Chevron (CVX) Achieves First LNG Production at Gorgon Stage 2

Chevron’s CVX unit in Australia and its Gorgon joint venture partners commenced gas production from the Gorgon Stage 2 development project off the coast of Western Australia. This is a milestone in the oil and gas industry.

The expansion project aims to enhance the existing subsea gas gathering network of the Gorgon Project, which supplies liquefied natural gas (“LNG”) to customers across Asia and caters to the domestic gas market in Western Australia.

Rationale Behind the Project

The Gorgon Stage 2 development project is a strategic initiative by Chevron to bolster the operations of the Gorgon LNG project. With a 47% ownership stake, CVX is the owner as well as the operator of this ground-breaking venture.

ADVERTISEMENT

The Gorgon LNG project is a joint endeavour, involving several industry stalwarts such as ExxonMobil XOM, Shell, and Japanese utilities like Osaka Gas, Tokyo Gas and JERA. This joint venture aims to harness the vast natural gas reserves in the Gorgon and Jansz-Io fields, and leverage them for the production and export of LNG.

The successful implementation of the Stage 2 development will have wide-ranging implications for the energy sector in Western Australia.

Expanding the Subsea Gas Gathering Network

One of the key aspects of the Gorgon Stage 2 development project is the expansion of the existing subsea gas gathering network. Chevron, through meticulous planning and execution, has installed 11 additional wells in the aforementioned fields to extract natural gas reserves.

The wells are accompanied by offshore production pipelines and subsea structures that play a crucial role in maintaining a steady feed gas supply for the gas processing facilities situated on Barrow Island.

The expansion will facilitate increased gas production and enhance the overall operational efficiency of the Gorgon LNG project.

Significance for the LNG Market

The successful implementation of the Gorgon Stage 2 development project holds immense significance for the global LNG market, particularly in Asia. The project, with its expanded infrastructure and enhanced production capabilities, strengthens Australia's position as a major LNG supplier.

The LNG sourced from the Gorgon fields is primarily exported to customers across Asia, where there’s growing demand for clean and reliable energy sources. The Gorgon LNG project contributes to the energy security and economic prosperity of Western Australia by fostering long-term partnerships and providing a sustainable energy solution.

Boosting the Western Australia Market

In addition to supplying LNG to international markets, the expansion project also plays a crucial role in meeting the domestic gas requirements of Western Australia. The increased production capacity, resulting from the expansion, enabled Chevron and its partners to ensure a stable and reliable gas supply for the Western Australia market.

This gas supply is essential for powering industries, supporting economic growth, and meeting the energy needs of residential and commercial consumers in the region. Chevron's commitment to the local market reinforces its position as a key contributor to the region’s energy landscape.

Environmental Stewardship and Sustainability

Chevron remains steadfast in its commitment to environmental stewardship and sustainability throughout the Gorgon Stage 2 development project. The company adheres to stringent environmental regulations and implements advanced technologies to minimize the project's ecological impact. These efforts include comprehensive monitoring systems, rigorous emissions control measures and the adoption of industry best practices.

Conclusion

The Gorgon Stage 2 development project not only strengthens Australia's position as a major LNG supplier to the Asian market but also helps meet the domestic gas requirements of Western Australia.

Through its dedication to environmental protection and sustainability, Chevron sets a benchmark for responsible energy development. As the company continues to drive innovation and excellence in the oil and gas sector, the Gorgon LNG project remains at the forefront of delivering clean and reliable energy solutions.

Zacks Rank and Key Picks

Chevron, through its subsidiaries, engages in integrated energy and chemical operations in the United States and abroad. The company operates under two segments — Upstream and Downstream.

ExxonMobil engages in the exploration and production of crude oil and natural gas in the United States and abroad. It operates under several segments — Upstream, Energy Products, Chemical Products and Specialty Products.

Both CVXand XOMcurrently carry a Zacks Rank #3 (Hold).

A couple of better-ranked stocks for investors interested in the energy sector are Evolution Petroleum EPM and Murphy USA MUSA, bothsporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Evolution Petroleum: EPM is worth approximately $271.47 million. EPM currently pays a dividend of 48 cents per share, or 5.88% on an annual basis.

The company currently has a forward P/E ratio of 7.38. In comparison, its industry has an average forward P/E of 19.60, which means EPM is trading at a discount to the group.

Murphy USA: MUSA is valued at around $6.30 billion. In the past year, its shares have risen 19.4%.

MUSA currently pays a dividend of $1.52 per share, or 0.53% on an annual basis. MUSA's payout ratio currently sits at 6% of earnings.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Chevron Corporation (CVX) : Free Stock Analysis Report

Exxon Mobil Corporation (XOM) : Free Stock Analysis Report

Murphy USA Inc. (MUSA) : Free Stock Analysis Report

Evolution Petroleum Corporation, Inc. (EPM) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research