Chevron Corporation (NYSE:CVX) has recently been identified as one of the undervalued S&P 500 stocks to buy according to hedge funds. This recognition comes on the heels of an announcement made by Energy Transfer (NYSE:ET) on June 25, where its subsidiary, Energy Transfer LNG Export, signed a 20-year Sale and Purchase Agreement (SPA) with Chevron USA Inc. The agreement entails an additional 1.0 million tonnes per annum (mtpa) of liquefied natural gas (LNG) from the proposed Lake Charles LNG export facility.
This new agreement brings Chevron’s total contracted volume from Energy Transfer LNG to 3.0 mtpa, following an initial 2.0 mtpa agreement signed in December 2024. Under the terms of both SPAs, the LNG will be supplied to Chevron on a free-on-board basis, with the purchase price comprising a fixed liquefaction charge and a gas supply component indexed to the Henry Hub benchmark.
The obligations of Energy Transfer LNG under the SPA are contingent upon the company making a positive final investment decision for the Lake Charles facility. This latest agreement with Chevron is part of Energy Transfer’s strategy to secure long-term LNG commitments for the Lake Charles LNG project. Other recent agreements include a Heads of Agreement with MidOcean Energy for approximately 5.0 mtpa and an SPA with Kyushu Electric Power Company for 1.0 mtpa.
Chevron Corporation engages in integrated energy and chemicals operations in the US and internationally, while Energy Transfer provides energy-related services in the US. While CVX shows promise as an investment, some AI stocks may offer greater upside potential with less downside risk. For investors seeking an undervalued AI stock that could benefit from Trump-era tariffs and the onshoring trend, a free report on the best short-term AI stock is available.
In conclusion, the partnership between Chevron and Energy Transfer signifies a significant step forward in the LNG market. As both companies continue to expand their presence in the energy sector, investors may find opportunities for growth and diversification in their portfolios.
