exxonmobile Corporation XOM signed an agreement with the fertilizer manufacturer CF Industries Holdings, Inc. CF to produce blue ammonia, which is expected to help decarbonize hard-to-reduce industrial facilities.
Illinois-based CF Industries is a leading producer of nitrogenous fertilizers in North America. One of the company’s main nitrogenous fertilizer products is ammonia. With the latest deal, CF wants to produce ammonia from low-carbon blue hydrogen, which is hydrogen produced from natural gas through carbon capture and storage (CCS).
CF Industries is investing $200 million to make a carbon dioxide (COtwo) dehydration and compression unit at its Louisiana facility to process emissions from its ammonia production. CF intends to trade up to 1.7 million tonnes of blue ammonia per year through CCS operations.
Under the terms of the agreement, ExxonMobil will transport CO2 from CF Industries’ ammonia production facility in Donaldsonville to a geological storage site in Louisiana. XOM will transport and store 2 million metric tons of CO2 per year underground. The project is likely to be operational in early 2025.
Oil and gas companies are becoming actively involved in CCS projects as it offers a transition path for rapid and effective reduction of COtwo emissions beyond what can be achieved with alternative methods such as electrification and renewable fuels. Therefore, the use of CCS in the reduction of industrial emissions offers an excellent opportunity.
ExxonMobil will develop a 125,000-acre storage site in Vermilion Parish for the CCS project. Companies could avoid the emission into the atmosphere of significant volumes of CO2 per year. This will be equivalent to replacing 700,000 gasoline cars with electric vehicles.
The deal is part of ExxonMobil’s plan to invest $15 billion in low-carbon projects by 2027. About $9 billion will be spent on emissions reductions at company sites, while the rest will be used for carbon capture. carbon, hydrogen and biofuels.
Company profile and price performance
Headquartered in Irving, TX, ExxonMobil is one of the world’s leading integrated energy companies.
ExxonMobil shares have outperformed the industry in the last six months. The stock has gained 12.1% against the 3% drop in the industry.
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Zacks range and other key picks
ExxonMobil currently boasts a Zack Rank #1 (Strong Buy).
investors interested in Energy The industry could look at the following companies that also currently have a Zacks Rank #1. You can see the full list of today’s Zacks #1 rank stocks here.
Patterson-UTI Energy, Inc. PTEN is one of the largest land drilling contractors in North America and has a large fleet of high quality drilling rigs. PTEN’s debt to capitalization at the end of the second quarter was 35.8%, quite conservative compared to 38.8% for the sub-industry to which it belongs.
Patterson-UTI has seen upward revisions to earnings estimates for 2022 and 2023 in the last 30 days. The company has a Zacks style score of A for growth and momentum. PTEN is expected to see earnings growth of 120.2% by 2022.
MPLX LP MPLX is a master limited company providing a wide range of midstream energy services, including fuel distribution solutions. MPLX LP is a leading limited company dedicated to providing a wide range of midstream energy services, including fuel distribution solutions.
MPLX beat the Zacks Consensus Estimate for earnings in the previous four quarters, with a 3% earnings surprise. The company has a Zacks Style Score of B for value and growth. MPLX is expected to see earnings growth of 14.7% by 2022.
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Exxon Mobil Corporation (XOM): Free Stock Analysis Report
PattersonUTI Energy, Inc. (PTEN): Free Stock Analysis Report
CF Industries Holdings, Inc. (CF): Free Stock Research Report
MPLX LP (MPLX): Free Stock Analysis Report
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