ConocoPhillips building out global LNG business

ConocoPhillips advanced its LNG strategy in the first half of 2023, completing the acquisition of an equity interest in Qatar’s North Field South project, agreeing to an offtake deal with the planned Saguaro LNG export facility in Mexico and securing regasification capacity at the Gate LNG Terminal in the Netherlands.

At its analyst and investor meeting in April, the company said it sees robust LNG demand growth well into the middle of the century, led by Asian importers. It aims to expand its LNG supply portfolio from six million metric tonnes per annum (mtpa) currently to over 12 mtpa by 2028.

Qatar acquisition

ConocoPhillips completed a deal making it one of three international partners, alongside TotalEnergies SE and Shell plc, in QatarEnergy’s North Field South (NFS) expansion project. The NFS project is two liquefied natural gas (LNG) trains with a combined capacity of 16 mtpa.

ConocoPhillips will have an effective net participating interest of 6.25 per cent in the NFS project, in addition to its existing 3.125 per cent stake in the 32 mtpa North Field East project.

Source: Evaluate Energy

QatarEnergy and ConocoPhillips will deliver LNG to Germany from the region in 2026, with the company also announcing it has secured 2.8 mtpa of regasification capacity at a planned terminal in Germany.

“That supports our two mtpa offtake from our LNG SPAs with Qatar and leaves 0.8 million mtpa to be supplied by our commercial LNG business,” said chief financial officer William Bullock.

Mexican waves

ConocoPhillips has also signed a 2.2 mtpa offtake agreement from the proposed Saguaro LNG terminal on the west coast of Mexico, which is well placed to supply Asian markets by avoiding Panama Canal fees. The project has yet to take FID.

“From a supply perspective, it really does complement our offtake from Port Arthur very nicely, creating some excellent optimization opportunities,” said Bullock.

The company has 5 mtpa of LNG supply from Phase 1 of Port Arthur LNG on the Gulf Coast, with FID already taken and startup slated in 2027. It also has access to excess uncontracted volumes from Phase 1 of the project and options for equity and offtake on future phases.

The company is planning a mix of long-term contracts, short-term contracts and spot sales across its portfolio to optimize pricing.

“We are actively developing placement into Europe. We’re developing long-term deliberate opportunities into Asia. And we’re considering some sales FOB at the facilities that are in the money right now,” said Bullock.

ConocoPhillips also has a partnership with Origin Energy Limited for Australia Pacific LNG (APLNG). It is comprised of a coalbed methane development operated by Origin Energy and an LNG production project operated by ConocoPhillips.

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