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Shell (RDS.A) and Qatargas Ink LNG Purchase and Sale Deal

Zacks Equity Research

European oil giant Royal Dutch Shell PLC RDS.A recently inked a purchase and sale agreement with world’s premier liquefied natural gas company Qatargas. Per the deal, Qatargas will deliver up to 1.1mn tonnes of LNG a year to Shell for five years starting Jan 2019. The company will supply LNG from Qatargas 4 – a joint venture between Qatargas and Shell where the former holds a 70% of ownership stake and the remaining 30% is held by Shell. It is expected that the LNG will either be delivered to the Dragon LNG Terminal in the United Kingdom or the Gate LNG Terminal in the Netherlands.

Qatargas was founded in 1984 and is currently the largest producer of LNG in the world with an annual production capacity of 42mn tonnes per year. Qatargas has successfully delivered cargoes to 28 countries since the first production in 1996 and is committed to meet the world’s demand for safe, reliable and clean energy.

This deal will provide Qatargas access to Shell’s gas sales portfolio in the United Kingdom and continental Europe. The agreement will also strengthen Shell’s relationship with Qatargas and is likely to provide reliable as well as flexible LNG supply to customers.

Zacks Rank and Key Picks

Headquartered in Netherlands, Shell is one of the largest integrated energy companies and is engaged in production, refining, distribution and marketing of oil and natural gas. Shell, operating under the Zacks categorized Oil & Gas-International Integrated industry, currently carries a Zacks Rank #5 (Strong Sell).

Royal Dutch Shell PLC Price


Royal Dutch Shell PLC Price | Royal Dutch Shell PLC Quote

Some better-ranked players in the same industry space include Braskem S.A. BAK, Enbridge Energy, L.P. EEP and Delek Logistics Partners, L.P. DKL. While Braskem and Enbridge Energy sport a Zacks Rank #1 (Strong Buy), Delek Logistics carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank  stocks here.

Braskem reported a positive average earnings surprise of 107.79% in the trailing four quarters.

Enbridge Energy reported a positive average earnings surprise of 38.22% in the trailing four quarters.

Delek Logistics is expected to deliver year-over-year growth of 59.40% and 18.84% in its revenues and sales respectively in 2017.

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