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Chevron Corporation CVX, the U.S. energy major, has entered into a sale and purchase agreement with Sembcorp Fuels, a subsidiary of Sembcorp Industries. Per the terms of the agreement, Chevron will supply liquefied natural gas (LNG) to Singapore for more than 10 years, beginning 2028. Sembcorp mentioned that Chevron will provide approximately 0.6 million tons of LNG per year.
Strengthening Singapore’s Energy Security
In 2021, the Energy Market Authority assigned Sembcorp as a new LNG importer for Singapore, authorizing the company to import and sell regasified LNG in the market. The agreement with Chevron should allow Sembcorp to expand its LNG portfolio, thereby increasing its supply of piped natural gas and liquefied sources globally. This should also contribute to Singapore’s energy security by diversifying its natural gas sources.
Sembcorp aims to forge partnerships to strengthen its position and improve its capacity to support customers in Singapore. These collaborations enhance its ability to provide a secure and reliable supply of gas at a competitive cost, benefiting its customers. Sembcorp also mentioned that these strategic partnerships align with the broader goal of maintaining a stable energy supply during Singapore’s energy transition journey, as natural gas is a cleaner burning fuel compared to other fossil fuels.
Chevron’s Commitment to Low-Carbon Energy
Chevron stated that it shall leverage its strategic collaborations to provide greater access to low-carbon energy sources globally. The company’s long-term agreement with Sembcorp reflects its commitment to delivering stable, secure and clean energy resources to its customers to enhance energy security, while also working toward reducing emissions from its operations.
CVX’s Zacks Rank and Key Picks
Currently, CVX carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the energy sector are FuelCell Energy FCEL, TechnipFMC plc FTI and Nine Energy Service NINE, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
FuelCell Energy is a clean energy company offering low-carbon energy solutions. It produces power using flexible fuel sources such as biogas, natural gas and hydrogen. The company designs fuel cells that generate electricity through an electrochemical process that combines fuel with air, reducing carbon emissions and minimizing the environmental impact of power generation. As such, FCEL is anticipated to play a crucial role in the energy transition by enabling industries and communities to shift from traditional fossil fuels to low-carbon alternatives.