Eni & Shell to Cease Gas Plant Development in Kazakhstan Amid Disputes

Eni SpA E and Shell plc SHEL have received orders from Kazakhstan government to terminate their plans for the construction of a gas processing plant at the Karachaganak gas and condensate development. Authorities in Kazakhstan have resorted to this move due to ongoing disputes over the project’s cost and its timeline, both of which remain uncertain.Rising Costs and Delays Fuel DisputeOn May 17, a government agency in Kazakhstan, responsible for overseeing the protection of state interests, sent a letter to the shareholders of the Karachaganak gas project. In this letter, the agency asked the shareholders to cease all activities related to the gas processing plant immediately. The letter mentioned that the reason for this decision was the rising costs associated with the project and the delay in its estimated time of completion.Per a Bloomberg report, the cost associated with the development of the gas processing plant has increased to $6 billion. The report further stated that the group of international companies involved in this project, led by Shell and Eni, has pushed back the planned completion of the facility to 2030 from the previously stated date in 2028.Kazakh Government Eyes Alternate PlanThe companies have also asked the government of Kazakhstan to support them by contributing approximately $1 billion toward the project’s expenses. The financial help from the government would help the companies make the project commercially feasible. In light of these developments, the Kazakh government is considering an alternative to develop the refinery independently. Zacks Rank & Key PicksBoth E and SHEL currently carry a Zacks Rank #4 (Sell).Some better-ranked stocks from the energy sector are Flotek Industries Inc. FTK and Energy Transfer ET. While Flotek Industries sports a Zacks Rank #1 (Strong Buy) at present, Energy Transfer carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.Flotek Industries specializes in green chemistry, which provides innovative solutions aimed at reducing the environmental impact of the energy industry. Flotek develops specialty chemicals tailored for both domestic and international energy producers, as well as oilfield service companies. These chemicals not only help reduce the environmental impact of hydrocarbon production but also lower operational costs.Energy Transfer is a midstream player that owns and operates one of the most diversified portfolios of energy assets in the United States. Boasting a pipeline network extending more than 130,000 miles, its network spans over 44 states. With a presence in all the major U.S. production basins, ET’s outlook seems positive.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Eni SpA (E): Free Stock Analysis Report Energy Transfer LP (ET): Free Stock Analysis Report Flotek Industries, Inc. (FTK): Free Stock Analysis Report Shell PLC Unsponsored ADR (SHEL): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks