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Shell (SHEL) to Go Ahead With $2.5B Crux Project in Australia

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Shell plc SHEL, the British energy major, announced recently that its Australian subsidiary, Shell Australia Pty Ltd, along with its joint venture partner, SGH Energy, decided to approve the development project of the Crux natural gas field, situated off the coast of Western Australia.

The development of the project is anticipated to cost around $2.5 billion and the construction will begin in 2023, with the first gas expected to be pumped in 2027. The production at Crux will feed the 3.6 million ton a year Prelude floating liquefied natural gas (“FLNG”) facility by supplying up to 550 million standard cubic feet of gas per day to the FLNG facility.

Shell mentioned that this project forms an essential part of its portfolio and that the natural gas output from it would help its Asian customers move from coal to gas as a cleaner-burning fuel and also provide a secure energy source. “The project will help us to meet the increasing demand for LNG as the energy market transitions to a lower-carbon future,” Shell added.

Shell Australia Chair, Tony Nunan, said that the development of the Crux project emphasizes Shell’s commitment to Australia, including enhancing the regional economy, generating jobs and providing training opportunities. “The use of Prelude’s existing infrastructure enables significantly reduced development costs, making Crux competitive and commercially attractive,” he ended.

The Crux field is situated in the Commonwealth marine waters of the northern Browse Basin, about 620 kilometers northeast of Broome. The development will comprise a platform operated remotely from Prelude. Initially, five wells will be drilled and an export pipeline will link the platform to Prelude, which is approximately 160 kilometers southwest of Crux.

Headquartered in London, Shell is one of the primary oil supermajors, a group of U.S. and Europe-based big energy multinationals with operations spanning worldwide. The company is fully integrated as it participates in every aspect related to energy, from oil production to refining and marketing. SHEL operates as an energy and petrochemical company. Shell plc was formerly known as Royal Dutch Shell.

Shell currently has a Zacks Rank #3 (Hold). Investors interested in the energy space might look at the following companies — Enerplus ERF, PDC Energy PDCE and Imperial Oil IMO — each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Enerplus’ 2022 earnings has been revised 26% upward over the past 60 days.

The Zacks Consensus Estimate for Enerplus’ 2022 earnings is pegged at $3.35 per share, up 245.4% from the projected year-ago earnings of 97 cents. ERF stock has rallied 143.5% in a year.

Imperial Oil is valued at around $37.3 billion. The Zacks Consensus Estimate for Imperial Oil’s 2022 earnings is projected at $6.98 per share, up about 151% from the projected year-ago earnings of $2.78.

The Zacks Consensus Estimate for IMO’s 2022 earnings per share has been revised from $5.24 to $6.98, up about 33.2%, in the past 60 days. Imperial Oil’s stock has gone up 66.7% in a year.

PDC Energy’s stock price has rallied 81.1% in a year. The Zacks Consensus Estimate for PDC Energy’s 2022 earnings has been revised about 32% upward over the past 60 days from $13.90 per share to $18.33.

The Zacks Consensus Estimate for PDCE’s 2022 earnings is pegged at $18.33 per share, up 129.4% from the projected year-ago earnings of $7.99.


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