Oil giant, ExxonMobil Corporation (XOM) is progressing with its plan to spend about C$25 billion ($21 billion) on a project relating to the export of liquefied natural gas (LNG) from Canada.
The company is not discouraged by the fall in crude prices. According to an environmental review application submitted last week to the British Columbia provincial government, ExxonMobil, along with Canadian affiliate Imperial Oil Ltd., is contemplating the construction of a facility on the Pacific Coast. The facility would initially liquefy and export 15 million metric tons of LNG per year.
Exxon’s WCC LNG Project Ltd. is one of the 18 export facilities proposed for Canada’s Pacific Coast. The facility will be used for cooling gas from British Columbia for shipment to the Asian markets by tankers. Last month, Petroliam Nasional Bhd. postponed its decision to build its C$36 billion LNG project in Canada citing low oil prices. BG Group Plc also deferred a similar proposal.
The construction of WCC LNG Project is scheduled to begin in 2017. The first shipments for the proposal are expected in 2024. Full-fledged construction for the first phase would involve around 6,000 workers on site.
According to a Jun 2013 filing with Canada’s National Energy Board, the project was initially anticipated to commence exports during the 2021–2023 timeframe.
ExxonMobil, with its expertise in gas production to LNG marketing, holds a key advantage over its competitors. The company’s LNG investments are spread across Qatar to Papua New Guinea. Global oil prices have fallen over 55% since Jun 2014 mainly due to excess supply and declining demand.
Currently, ExxonMobil carries a Zacks Rank #5 (Strong Sell). Better-ranked stocks from the same industry include Enbridge Energy Management LLC (EEQ), Seadrill Partners LLC (SDLP) and QEP Midstream Partners, LP (QEPM). Each of these stocks sports a Zacks Rank #1 (Strong Buy).
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