Shell plc SHEL on Dec. 2, 2024, has announced an accord with QatarEnergy to secure 3 million metric tons per annum of liquefied natural gas (LNG) for delivery to China starting January 2025. This deal will strengthen Shell’s footprint in Asia, the biggest LNG market.
China, the world’s largest LNG buyer, imported 71 million metric tons in 2023 and a record high of 79 million metric tons in 2021. As the Asian economies welcome cleaner energy, SHEL forecasts that there will be 50% growth in this market by 2040, and natural gas will be positioned as a key replacement for coal in the future.
With this deal, SHEL has inked the 11th LNG supply agreement with QatarEnergy, marking its stronghold in the LNG trading market. With QatarEnergy, Zacks Rank #3 (Hold) Shell had previously joined forces on various global ventures, including a 20-year naphtha supply deal and the Pearl GTL plant. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
SHEL’s robust LNG sale in the Asian markets not only strengthens its portfolio but also supports its strong financial performance reflected in its latest quarterly result.
QatarEnergy can foresee a bright future for LNG in Asian markets for at least the next 50 years, which secures SHEL’s position as a leading LNG trader while transitioning to sustainable solutions. QatarEnergy also announced its plan to expand production in the North Field, the largest gas reservoir, to increase the country’s LNG production capacity by 16 million tons annually.
With recent policy shifts favoring LNG expansion in the U.S. markets, investors can also monitor other LNG companies like Cheniere Energy, Inc. LNG and Chevron Corporation CVX.
Cheniere, the first company to receive regulatory approval to export LNG from its 2.6 billion cubic feet per day Sabine Pass terminal, enjoys a distinct competitive advantage over other natural gas companies.
Chevron, one of the biggest companies dealing in LNG, is also working on major LNG projects like the Gorgon and the Wheatstone in Australia, which will help it secure a stronghold in the growing Asian market.
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