Exxon Mobil Corporation XOM has signed an agreement with Guangdong Energy Group in Chinato to use its new LNG receiving terminal for 20 years. The $1 billion LNG receiving terminal is located in Huizhou in the Guangdong province. This terminal is expected to begin commercial operations in the upcoming week, per Reuters.

The LNG terminal has the capacity to handle 4 million metric tons of liquefied natural gas per year. Furthermore, for trial operations, the terminal has received its initial cargo from the UAE in the past month.

Expansion of ExxonMobil's Global LNG Operations

An ExxonMobil representative in China has confirmed that the company had entered into a 20-year agreement with Guangdong Energy to utilize the new LNG terminal, in December last year. The company, however, had not made any announcement regarding the matter.

According to sources, XOM will use the terminal to handle 1.8 million tons of LNG per year. The sources also mentioned that the agreement does give the U.S. energy giant an equity stake in the facility. The terminal will be used partially for supplying gas to ExxonMobil’s billion-dollar chemical complex in Huizhou. This complex is currently under construction and operations are anticipated to commence in 2025.

Guangdong Energy is a government-backed utility and power services firm in China. The company started the construction of this new LNG terminal in 2021. The terminal boasts three storage tanks, each having a capacity of 200,000 cubic meters and one berth that can receive LNG tankers with a capacity of 266,000 cubic meters.

XOM's Zacks Rank and Key Picks

Currently, XOM carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the energy sector are PEDEVCO Corp. PED,TechnipFMC FTI and VAALCO Energy EGY. PEDEVCO presently sports a Zacks Rank #1 (Strong Buy), while TechnipFMC and VAALCO Energy carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

PEDEVCO is engaged in the acquisition and development of energy assets in the United States and Pacific Rim countries. PED stands to benefit significantly from its holdings in the Permian Basin, one of the most prolific oil-producing regions in the United States, as well as in the D-J Basin in Colorado, which includes more than 150 high-quality drilling locations. Combined with bullish oil prices, this is expected to boost the company's production and overall profitability.

TechnipFMC is a leading manufacturer and supplier of products, services and fully integrated technology solutions for the energy industry. The company’s total backlog witnessed a record high of $13.9 million in the second quarter of 2024, indicating a year-over-year increase of 4.51%. This growing backlog ensures strong revenue growth for FTI.

VAALCO Energy is an independent energy company involved in upstream business operationswith a diversified presence in Africa and Canada. Having a large inventory of drilling locations in premium Acreage of Canada, EGY’s production outlook seems bright.

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