Chevron (CVX) Partners With Sembcorp to Lower LNG Emissions

Chevron Corporation (CVX), through its subsidiary Chevron Shipping Company LLC, recently announced its partnership with Sembcorp Marine Repairs & Upgrades Pte. Ltd. — an entirely owned subsidiary of Sembcorp Marine Ltd. (Sembcorp Marine). The objective is to modify Chevron’s liquefied natural gas (LNG) carrier fleet for lower carbon emissions.

The project involves installing new technologies on Chevron vessels to aid the company’s transition to renewable energy. The changes are in line with the International Maritime Organization’s (IMO) decarbonization goals, which call for a 50% reduction in shipping-related greenhouse gas emissions by 2050. The project is expected to be completed by the middle of 2025, with the first vessel modified and ready for service by 2024.

With its LNG fleet modifications, Chevron is taking a proactive approach to reduce its carbon footprint and contribute to a more sustainable energy future. The company recognizes the increasing demand for LNG in the coming years and its responsibility to produce and transport this valuable energy source in an economically and environmentally sustainable manner.

The project involves modifying six of Chevron’s existing LNG carriers, with the option to modify additional vessels in the future. The retrofitting process will take place in Singapore, where Sembcorp Marine’s facilities and expertise are well-suited to the task.

The LNG fleet modification project is expected to have a significant impact on the environment by reducing Chevron’s carbon footprint. The hybrid electric propulsion systems will enable the vessels to operate on cleaner electric power, thereby reducing their greenhouse gas emissions by up to 26%.

This reduction in carbon emissions is a critical step toward a more sustainable energy future, especially with growing LNG demand. It demonstrates Chevron’s commitment to reducing its environmental impact and contributing to the fight against climate change.

Chevron, a leading integrated energy company with operations worldwide, generates approximately $95 billion in annual revenues and produces more than 3 million barrels of oil equivalent per day.

Zacks Rank & Key Picks

Currently, Chevron carries a Zacks Rank #3 (Hold). Investors interested in the energy sector might look at some better-ranked stocks like NGL Energy Partners (NGL) sporting a Zacks Rank #1 (Strong Buy) and Energy Transfer ET and Halliburton (HAL) both holding a Zacks Rank #2 (Buy).You can see the complete list of today’s Zacks #1 Rank stocks here.

NGL Energy Partners is worth approximately $365.07 billion. Its shares have increased 28.7% in the past year.

NGL Energy Partners LP is a limited partnership company that operates a vertically-integrated propane business with three segments — retail propane, wholesale supply and marketing, and midstream.

Energy Transfer LP is valued at around $39.80 billion. ET delivered an average earnings surprise of 11.43% for the last four quarters, and its current dividend yield is 9.49%.

Energy Transfer LP currently has a forward P/E ratio of 8.93. In comparison, its industry has an average forward P/E of 10.40, which means Energy Transfer LP is trading at a discount to the group.

Halliburton is valued at around $33.44 billion. In the past year, HP stock has increased by 40.2%.

TX-based Halliburton Company, headquartered in Houston, is one of the largest oilfield service providers in the world with a trailing four-quarter earnings surprise of roughly 5.87%, on average.

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