Shell plc SHEL, a London-listed energy major, has signed a long-term naphtha supply deal with QatarEnergy. Per the terms of the agreement, QatarEnergy will supply 18 million metric tons of naphtha to Shell over a duration of 20 years. The deal is expected to begin in April next year.

The head of QatarEnergy has highlighted that the naphtha supply agreement is its longest and largest supply deal to date. This is the latest one in a string of deals that QatarEnergy has signed with Asian and European partners. The agreement is supported by the North Field expansion in Qatar, which is part of the largest natural gas field in the world. Qatar shares this natural gas field with Iran, where it is called South Pars. The field is expected to begin production in 2026.

The deal has also strengthened the long-standing partnership between Shell and QatarEnergy. The two companies have jointly invested in multiple energy projects worldwide and in Qatar, including QatarEnergy's LNG projects and the Pearl GTL plant. The latest deal demonstrates QatarEnergy’s commitment to building long-term partnerships with other major players in the energy landscape.

SHEL’s Zacks Rank and Key Picks

Currently, SHEL carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the energy sector are PEDEVCO Corp. PED, Archrock Inc. AROC and FuelCell Energy FCEL. PEDEVCO and Archrock presently sport a Zacks Rank #1 (Strong Buy) each, while FuelCell Energy carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

PEDEVCO is engaged in the acquisition and development of energy assets in the United States and Pacific Rim countries. PED stands to benefit significantly from its holdings in the Permian Basin, one of the most prolific oil-producing regions in the United States, and in the D-J Basin in Colorado, which includes more than 150 high-quality drilling locations. Combined with bullish oil prices, this is expected to boost the company's production and overall profitability.

Archrock is an energy infrastructure company based in the United States, with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues.

FuelCell Energy is a clean energy company offering low-carbon energy solutions. It produces power using flexible fuel sources such as biogas, natural gas and hydrogen. The company designs fuel cells that generate electricity through an electrochemical process that combines fuel with air, reducing carbon emissions and minimizing the environmental impact of power generation. As such, the company is anticipated to play a crucial role in the energy transition by enabling industries and communities to shift from traditional fossil fuels to low-carbon alternatives.