Shares of ExxonMobil (NYSE: XOM) rose 6.2% on Tuesday after the energy giant struck a deal with QatarEnergy to increase its liquified natural gas (LNG) production.
Under the terms of the agreement, ExxonMobil will obtain a 6.25% stake in Qatar’s $29 billion North Field East project. The collaboration is intended to help increase the Middle Eastern country’s LNG capacity from 77 million tons to 110 million tons by 2026.
“We look forward to working closely with ExxonMobil to implement this world-scale project, and to live up to our commitment to power lives with cleaner energy in every corner of the world,” QatarEnergy CEO Saad Sherida Al-Kaabi said in a press release.
The deal comes at a time when governments across the globe are racing to secure natural gas from reliable suppliers after Russia reduced shipments to several European countries amid its war with Ukraine. Qatar and ExxonMobil hope to help fill the increasingly vital need for stable supplies of natural gas in the coming years.
Bullish remarks from Credit Suisse analyst Manav Gupta also likely contributed to ExxonMobil’s gains on Tuesday. Gupta praised management’s commitment to boosting its oil and gas production in the coming decade. ExxonMobil invested aggressively even as many of its rivals pared back their spending. As a result, the company now possesses some of the best assets in the energy industry.
Gupta, in turn, placed an outperform rating on ExxonMobil’s stock. He now sees the energy titan’s shares surging roughly 37% to $125.