Shell, Gazprom To Enter Into Agreement On Baltic LNG Project

According to a report recently published by Reuters, integrated energy major, Royal Dutch Shell (LON:RDSa) plc RDS.A and Russian gas giant Gazprom (MCX:GAZP) are expected to enter into an agreement on a planned Baltic liquefied natural gas (LNG)project. The deal is likely to be associated with the acquisition of 25–35% stake in the project. The duo is expected to ink a deal at the annual investment forum in St Petersburg later this week.

Per sources, the project will involve the construction of a two-train LNG plant. Also, a 360-kilometer gas pipeline to connect the facility with the Gazprom-operated trunkline network will be part of the project. Gazprom plans to build the plant with a production capacity of about 10 million tons of liquefied natural gas yearly with an expansion option up to 20 million tons. The plant is scheduled to become operational by Dec 2021.

Headquartered in The Hague, the Netherlands, Shell is one of the largest integrated oil and gas companies in the world. It explores for and extracts crude oil, natural gas and natural gas liquids. It has interests in chemicals as well as in power generation and renewable energy. Recently, Shell has decided to restart buying Iranian crude and is the second leading energy player after Total S.A. (TO:TOT) to recommence trade with Iran since the country came out of sanctions.

Shell currently carries a Zacks Rank #3 (Hold), which implies that the stock will perform in line with the broader U.S. equity market over the next one to three months.

Some better-ranked players from the broader energy sector are PetroChina Co. Ltd. (NYSE:PTR) , and PBF Logistics LP (NYSE:PBFX) . Both these stocks sport a Zacks Rank #1 (Strong Buy).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>