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Chevron to Deliver Kaybob Duvernay NGL to Keyera Terminal


Energy giant Chevron Corporation’s CVX Canadian subsidiary has inked a 20-year deal with Keyera Corp – leading midstream energy player in Canada.

Per the agreement, Chevron is expected to provide almost 50% of natural gas liquids (NGL) – produced from upstream activities at Kaybob Duvernay shale gas play – to the midstream facilities of Keyera. The Kaybob Duvernay play is located close to Fox Creek, Alberta.

Chevron’s NGL is anticipated to be delivered to the terminals of Keyera for storage and fractionation works. From the services, Keyera is expected to generate stable fee-based revenues. Keyera added that it will expand its midstream infrastructure properties provided Chevron’s operations in the Duvernay shale play remains profitable.

Along with the NGL deal, Chevron has proceeded with its liquefied natural gas (LNG) project. On Oct 8,Chevron announced the commencement of LNG production from its Wheatstone Project. The company is expected to dispatch the first cargo vessel from its $34-billion worth LNG development in Western Australia by the weeks to come.

Chevron initially planned to commence LNG export from Wheatstone Project’s Train 1 by mid-2017. Per the media resources, Train 2 of the development will likely be operational within six to eight months. With the start of Train 2’s operation, the Wheatstone Project will be able to produce 8.9 million metric tons of LNG every year. Hence, Chevron could generate significant cashflow from exporting the substantial LNG volumes to Asian customers.

Chevron has a 64.1% stake in the Wheatstone Project. Kuwait Foreign Petroleum Exploration Company has a 13.4% interest while Woodside Petroleum Limited and Kyushu Electric Power Company have 13% and 1.5% stakes, respectively. The remaining 8% is owned by PE Wheatstone Pty Ltd.

Headquartered in San Ramon, CA, Chevron is a leading integrated energy player. Over the past year, the company has gained 15.3%, outperforming the industry’s 6.8% rise.

Presently, Chevron carries a Zacks Rank #3 (Hold). A few better-ranked players in the energy sector are Par Pacific Holdings Inc. PARR, Enbridge Energy Partners, L.P. EEP and Jones Energy, Inc. JONE. All the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Headquartered in Houston, TX, Par Pacific managed to beat the Zacks Consensus Estimate in three of the last four quarters, at average earnings surprise of 195.26%.

Houston, TX-based Enbridge Energy, a master limited partnership (MLP), is a midstream energy player. The partnership recorded an average positive earnings surprise of 22.83% over the last four quarters.

Based in Austin, TX, Jones Energy is an upstream energy player. The company’s 2017 earnings are estimated to grow 31.6%.

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