Yahoo Finance ExxonMobil (XOM), Air Liquide Partner for Texas Hydrogen Project
ExxonMobil Corporation XOM, the U.S. energy major, has partnered with French industrial gas supplier Air Liquide, in a significant step toward reducing carbon emissions. This partnership aims to support the decarbonization of industrial operations along the U.S. Gulf Coast.
Enhancing Low-Carbon Hydrogen Production
Per the terms of the agreement, XOM will use Air Liquide's existing pipeline network to transport low-carbon hydrogen. This integration is critical for ExxonMobil's strategy to expand the low-carbon hydrogen market along the U.S. Gulf Coast, providing industrial customers with sustainable options to decarbonize their operations.
Air Liquide will play a pivotal role by constructing and operating four large modular air separation units at the Baytown site. These units are designed to supply 9,000 metric tons of oxygen and up to 6,500 metric tons of nitrogen daily, primarily using low-carbon electricity. This approach significantly reduces the carbon footprint of the project.
Project Scope and Key Comments
The Baytown facility is expected to produce 1 billion cubic feet of low-carbon hydrogen daily and more than 1 million tons of ammonia annually. Remarkably, the project is planned to capture more than 98% of the associated CO2 emissions, showcasing a commitment to sustainable and environmentally friendly practices.
Dan Ammann, president of ExxonMobil Low Carbon Solutions, highlighted the significance of the partnership. He noted that the collaboration with Air Liquide enhances the Baytown project by facilitating hydrogen distribution through existing networks and securing essential feedstocks, contributing to the momentum of the world’s largest low-carbon hydrogen initiative and the evolving hydrogen market.
Future Plans and Milestones
Production at the Baytown facility is slated to commence in 2028, with a final investment decision (FID) anticipated in 2024. This decision will be subject to stakeholder support, regulatory permitting and market conditions.
Earlier this year, in March 2024, ExxonMobil signed a framework agreement with Japanese energy major JERA. This agreement includes exploring JERA’s ownership participation in the Baytown project and the procurement of low-carbon ammonia for Japan's energy needs.
Conclusion
ExxonMobil's partnership with Air Liquide represents a significant advancement in the pursuit of low-carbon hydrogen and ammonia production. By integrating Air Liquide’s expertise and infrastructure, ExxonMobil aims to create a robust and sustainable low-carbon hydrogen market, supporting global efforts to reduce industrial carbon emissions and transition to cleaner energy solutions.
Zacks Rank & Key Picks
ExxonMobil currently carries a Zack Rank #3 (Hold).
Investors interested in the energy sector may look at some better-ranked stocks like Archrock Inc. AROC, SM Energy Company SM and Sunoco LP SUN, each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Archrock is an energy infrastructure company based in the United States, focusing on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues.
The Zacks Consensus Estimate for AROC’s 2024 EPS is pegged at $1.07. The company has a Zacks Style Score of A for Growth. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 60 days.
SM Energy is set to expand its oil-centered operations in the coming years, with an increasing focus on crude oil, especially in the Permian Basin and Eagle Ford regions. The company’s attractive oil and gas investments should create long-term shareholder value.
The Zacks Consensus Estimate for SM’s 2024 EPS is pegged at $6.63. The company has a Zacks Style Score of A for Value. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 60 days.
Sunoco is a leading wholesale motor fuel distributor in the United States, boasting a vast distribution network spanning 40 states. With long-term contracts servicing more than 10,000 convenience stores, it distributes over 10 fuel brands, ensuring a stable revenue stream. SUN currently has a Value Score of A.
The Zacks Consensus Estimate for 2024 and 2025 earnings per unit is pegged at $7.29 and $7.17, respectively. The partnership has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.
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
Exxon Mobil Corporation (XOM) : Free Stock Analysis Report
Sunoco LP (SUN) : Free Stock Analysis Report
SM Energy Company (SM) : Free Stock Analysis Report
Archrock, Inc. (AROC) : Free Stock Analysis Report
