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PetroChina (PTR) Subsidiaries to Expand LNG & Oil Terminals

Zacks Equity Research

Two subsidiaries of PetroChina Company Limited PTR recently struck deals with Yantai Port Group, a state-run port operation services provider, to develop a new liquified natural gas (LNG) receiving terminal. The companies will also jointly work on enhancing a crude oil terminal at Yantai port, located in the eastern part of Shandong province.

LNG Terminal Deal

PetroChina’s unit, Kunlun Energy, along with Yantai Port Group will invest ¥7 billion ($1 billion) to construct the LNG terminal, which will have four storage tanks of 200,000 cubic meters. Both the companies will also build a dock, with a capacity of receiving LNG vessels of 266,000 cubic meters.

The subsidiary of PetroChina already operates three major LNG terminals in the Jiangsu, Hebei and Liaoning provinces, with 19.3 million metric tons per year of LNG receiving capacity. It also has a small LNG reserve storage in the Hainan island. The company has two projects associated with LNG terminals under construction, which are expected to come online by 2020. Per S&P Global Platts, Kunlun intends to build 11 LNG import terminals, which are expected to ramp up its LNG receiving capacity by 80 million metric tons per annum by 2030.

Crude Oil Terminal

Another subsidiary of PetroChina, PetroChina Fuel Oil, coupled with Yantai Port Group intends to invest about ¥5 billion ($739.9 million) to expand a crude oil terminal and storage tanks at west Yantai port, and build the second phase of its Yantai-Zibocrude oil pipeline in the Shandong province. Notably, a joint venture between CNOOC Limited CEO and Yantai Port Group operates the existing phase 1 crude terminal, which came online in September 2016.

Price Performance

PetroChina is the largest integrated oil company in China. It has lost 17.4% in the past year compared with 10.4% decline of its industry.


Zacks Rank and Stocks to Consider

Currently, the stock carries a Zacks Rank #5 (Sell). Investors interested in the energy sector can opt for some better-ranked stocks as given below.

Houston, TX-based Shell Midstream Partners, L.P. SHLX is a midstream energy company. For 2019, its bottom line, which has witnessed three upside revisions over the past 60 days, is expected to grow 27.7% year over year. The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Calgary, Canada-based Gran Tierra Energy Inc. GTE is an international oil and gas exploration and production company. Its bottom line for 2018 is expected to surge more than 300% year over year. The company delivered average positive earnings surprise of 24% in the trailing four quarters. The stock currently has a Zacks Rank #2 (Buy).

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