Exxon Mobil (XOM) is among a group of Western energy companies that could be part of a major Qatar liquefied natural gas (LNG) project, according to a Bloomberg report. XOM stock gained about 4.6% to close at $103.37 on June 7.
Texas-based Exxon is an integrated multinational oil and gas company that arose from the breakup of John Rockefeller’s Standard Oil empire. Exxon shares have soared more than 66% year-to-date as high oil prices have drawn many investors into oil stocks.
Exxon Gives Investors Another Reason to Be Excited
Qatar is looking to increase its gas exports. International demand for Qatar’s LNG may be high now as Europe seeks to cut its reliance on Russian energy following the country’s attack on Ukraine.
Qatar plans to build a giant gas facility that could cost more than $30 billion as part of its efforts to boost its export of the commodity. Exxon, TotalEnergies (TTE), ConocoPhillips (COP), and Shell (SHEL) have sought to be partners in the project. Chevron (CVX), Warren Buffett’s favorite oil stock, has also been previously mentioned as a potential partner in Qatar’s gas project.
The state-run QatarEnergy is close to announcing the partners in its giant LNG project, and Exxon and Total may be on the list, according to the report.
LNG Facility to Be Developed in Phases
Qatar’s export-focused gas facility is expected to come online by 2026 and be able to produce 130 million tons annually by 2027. The facility is expected to be developed in phases, with the initial phase involving the building of four gas liquefaction units that can each produce eight tons per year. According to the report, QatarEnergy may unveil partners for the first phase of the project this weekend.
Wall Street’s Take
On June 7, Evercore ISI analyst Stephen Richardson upgraded Exxon’s rating to a Buy from a Hold. Richardson also raised the stock’s price target from $88 to $120, which implies 16% upside potential.
The rest of the Street is cautiously optimistic about the stock, with a Moderate Buy consensus rating, based on 10 Buys and seven Holds. The average Exxon Mobil price target of $101.6 implies 1.7% downside potential from current levels.
Stock Investors
TipRanks’ Stock Investors tool shows that investor sentiment is currently Positive on Exxon Mobil, with 1.7% of portfolios tracked by TipRanks increasing their exposure to XOM stock over the past 30 days.
Key Takeaway for Investors
The global liquefied natural gas market is forecast to grow to $208.85 billion by 2030, from $109.48 billion in 2021. Winning a stake in Qatar’s new gas project could give Exxon a larger exposure to this lucrative market.
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