Chevron Corporation (NYSE:CVX) , one of the world’s leading energy companies is involved in production and distribution of all forms of energy products viz. Transportation fuel, generating power, natural gas, petrochemical products, and also in refining and transportation of crude oil. It has its existence in the United States, Australia, South America and Asia.
Recently the company has announced that it will buy stakes in Natural Gas plant situated in Kitimat (Vancouver). As per the existing plan two companies Encana Corporation (NYSE: ECA) and EOG Resource Inc. (NYSE: EOG) Resources Inc holds the stake equivalent to 30% each and Apache Inc holds the remaining 40%. Chevron Corporation (NYSE:CVX) is reportedly said to take a 50% stake in the plant resulting a rise in the stake of Apache Inc to 50%.
This agreement will involve Chevron Corporation (NYSE:CVX) in operation of pipeline and terminal and Apache for Gas production. The amount spent by Chevron Corporation (NYSE:CVX) in the deal was not revealed, but Analysts say that Encana Corporation (NYSE:ECA) and EOG Resource Inc. (NYSE:EOG) received $450M each. Previously the plant was run by Apache and faced lots of practical difficulties in signing agreement of sale. Production and distribution of Natural gas involve a big player and a customer would want to buy only from a reputed company which has established significantly in the industry.
It is believed that the Chevron Corporation (NYSE:CVX) will make the plant operational soon and will be able to export natural gas to Asian countries. Previously the Canadian National Energy Board has given approval for exporting 10 Million tons of Natural gas to Asian Countries. The country is also confident about the deal as Apache and Chevron Corporation (NYSE:CVX) already partner a plant in Australia and running successfully.
As far as the Encana Corporation (NYSE:ECA) and EOG RESOURCE INC. (NYSE:EOG) are concerned it is a win-win situation because Encana Corporation (NYSE:ECA) has suffered a lot of cash spending on the project and use the proceeds of the deal for natural gas production and EOG Resource Inc. (NYSE:EOG) in crude oil. Chevron Corporation (NYSE:CVX) on the other hand will amass plants in production and export of Natural gas.
However there are never a few players in Energy plants. There is a potential for many other players like Kuwait Foreign Petroleum Exploration, Royal Dutch Shell PLC. The Kyushu Electric Power Company is entering as minority stakeholder.
Stocks of all the companies involved in the deal reduced ending last week but are potentially expected to increase in coming.
The shares of Chevron Corporation (NYSE:CVX) were down 0.98% to $108.63. The shares of Encana Corporation (NYSE:ECA) were down 2.12% to $19.82. The shares of EOG Resource Inc. (NYSE:EOG) were down 0.65% to $122.77.
Please make sure to read and completely understand our disclaimer at https://www.wallstreetpr.com/disclaimer. While reading this article one must assume that we may be compensated for posting this content on our website.