Chevron's $33bn purchase of Anadarko Petroleum will mean a boost for global LNG supply, according to analysts from Deutsche Bank.
In a note, the bank's Chris Snyder wrote that the cash and stock deal shows commitment to the Anadarko-led Mozambique Area 1 LNG project, which should firm up a 2019 final investment decision.
The project will add 12.88 mtpa to a global supply set to add 120 mtpa by 2020, according to Deutsche Bank, and require the company secure access to no fewer than 16 gas carriers.
"Chevron has had difficulty building out its LNG portfolio in recent years with its Australian projects incurring significant cost overruns and delays," Snyder wrote.
"These difficulties likely attracted Chevron to the Mozambique project which boasts strong economics, allowing Chevron to lower its overall LNG breakeven, an important consideration as competition in the segment is heating up."
This week, Anadarko Singapore's Erick Weston told TradeWinds that there is a team of 8 working on the shipping side of the project, a number he expects to grow to 20 as the first gas is produced by 2023 or 2024.
In midday trading Friday, Chevron stocks were down just under 5% to $120.11.
Markets showed muted, if any response, for New York's LNG stocks. Golar LNG — Deutsche Bank's preferred LNG play — was down 1.3% to $21.19, while GasLog was up 1% to $16.97 and Hoegh LNG Partners was up less than 1% to $19.42.
