ExxonMobil Gets Regulatory Nod for Double E Gas Pipeline
Exxon Mobil Corporation’s XOM Double E Pipeline recently received favorable environmental assessment from the Federal Energy Regulatory Commission, following an environmental analysis. The regulatory authority expects the pipeline to have minimal impact on the human environment.
The 135.2-mile pipeline is owned by ExxonMobil and Summit Midstream Partners, LP SMLP. While ExxonMobil has a 30% ownership interest in the pipeline, the remaining 70% stake is owned by Summit Midstream. The Permian Basin natural gas pipeline project is expected to be commissioned in 2021. The pipeline will provide much relief to producers in the region, where natural gas comes as a buy-product of oil and flaring problems are faced due to huge production.
The pipeline will transport natural gas from the northern Delaware Basin in Eddy County to Waha, TX. It will ship the commodity through parts of Eddy and Lea Counties, located in New Mexico and Loving, Ward, Reeves and Pecos Counties in the state of Texas. The pipeline will provide 1,350 million standard cubic feet per day of shipping capacity. From Texas, the commodity will likely reach the markets along the U.S. Gulf Coast and Mexico.
The project highlights ExxonMobil’s efforts to reduce emissions via using cleaner burning natural gas. The news comes at a time when energy companies are sailing troubled waters amid tough market conditions due to the coronavirus pandemic. Last week, the company announced plans to slash 2020 capital spending by 30% or $10 billion from its original guidance to $23 billion, as low commodity prices amid an oversupplied industry are a concern for the global energy space. Other energy majors like Chevron Corporation CVX and BP plc BP have also adopted similar efforts to navigate through the current market uncertainty.
ExxonMobil recently raised $9.5 billion in new debt at a low price through selling five different bonds, in order to strengthen financial capabilities. Last month, the company issued $8.5 billion at a higher price. The latest move comes at a time when U.S. companies are tapping debt markets to stay afloat in volatile market conditions.
Price Performance
ExxonMobil, which currently has a Zacks Rank #3 (Hold), has lost 38.8% year to date compared with 35.9% decline of the industry it belongs to. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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