Yahoo Finance Shell (SHEL) & Hartshead Collaborate on North Sea Gas Fields
Shell plc SHEL and Hartshead Resources NL recently announced a partnership for the phased development of two gas fields in the southern North Sea. This partnership will bring new energy resources to the UK and reduce the country's reliance on foreign energy sources.
The two gas fields, located in the UK southern North Sea, have been estimated to contain a total of 25 billion cubic meters of natural gas. The first phase of the project will involve drilling and producing gas from the first field, called the Carboniferous field. The gas produced in this field will be transported through an existing pipeline to the Bacton gas terminal in Norfolk.
The second phase of the project will involve the development of the other gas field, called the Permian field. This field is located further offshore and will require the installation of a new pipeline to transport the gas to the shore. The development of these two gas fields will boost the UK’s domestic energy production, thereby addressing the country's energy security concerns.
Understanding the North Sea Gas Export Market
The North Sea is a key player in the global oil and gas industry, with a significant amount of natural gas being produced in the region. In recent years, there has been a growing demand for natural gas, leading to an increase in gas export agreements.
Shell and Hartshead's Gas Export Agreement
The agreement outlines the key commercial terms for the transportation and processing of Hartshead's Phase I gas field production. The gas will be transported to Shell's Leman Alpha platform through a pipeline and subsea connection, owned by Hartshead. It will then be transported to the Bacton Gas Terminal in Norfolk for processing and further delivery to the UK National Gas Transmission System.
This contract allows Hartshead to export gas to the European market via the Shell-operated Shell-Esso Gas and Liquids (“SEGAL”) pipeline system. The terms of the deal include a transportation rate and capacity commitment, which will enable Hartshead to supply gas to the European market at competitive prices. This is a significant achievement for Hartshead, as it will enable the company to expand its customer base and increase revenues.
Implications of the Gas Export Agreement
The gas export agreement between Hartshead and Shell has several implications for the North Sea gas market. First, it will increase the supply of natural gas to the European market, which will help in meeting the region’s growing demand for energy.
Second, the agreement will create opportunities for other gas producers in the North Sea region to enter the European market. This is particularly significant for smaller companies that may not have had the resources to enter the market previously.
Finally, the gas export agreement is expected to have a positive impact on the North Sea region’s economy by creating job opportunities and boosting financial growth.
In conclusion, the gas export agreement between Shell and Hartshead is a significant development in the North Sea gas market. It will increase the supply of natural gas to the European market, create opportunities for smaller gas producers, and have a positive impact on the North Sea region’s economy.
Shell is a multinational energy and petrochemical company, headquartered in London. It engages in the exploration, extraction, marketing and transportation of crude oil, natural gas and natural gas liquids. The company also produces gas-to-liquid fuels and other products.
Hartshead Resources, based in Perth, Australia, explores and develops oil and gas in Gabon, Madagascar and the UK. It has a 100% interest in License P2607 in the Southern North Sea, UK, covering 729.5 sq. km.
Zacks Rank and Key Picks
Currently, Shell 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 Helix Energy Solutions Group HLX, each holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
NGL Energy Partners: The company is worth approximately $367.70 million. Its shares have increased 19.5% in the past year.
NGL 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: The company is valued at around $37.10 billion. It delivered an average earnings surprise of 11.43% for the last four quarters and its current dividend yield is 10.18%.
ET currently has a forward P/E ratio of 8.41. In comparison, its industry has an average forward P/E of 9.20, which means the company is trading at a discount to the group.
Helix Energy Solutions Group: The company is valued at around $1.10 billion. In the past year, its shares have increased 52.7%.
HLX currently has a forward P/E ratio of 11.01. In comparison, its industry has an average forward P/E of 11.20, which means the company is trading at a discount to the group.
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