ConocoPhillips Doubles LNG Purchase from Port Arthur Project

ConocoPhillips, a prominent oil and gas company, has intensified its focus on the future of liquefied natural gas (LNG) in the United States. Through a recent agreement, the company has nearly doubled the amount of natural gas it will purchase from Sempra's expansion project at the Port Arthur LNG facility in Texas. This strategic move is aimed at expanding ConocoPhillips' international natural gas sales to meet the increasing demand in Asia and Europe.

The agreement, announced on Thursday, will increase the annual purchase volume from the Port Arthur LNG project's expansion phase to 400,000 tons. This is in addition to the existing 500,000 tons that ConocoPhillips is already committed to purchasing from the project's first phase, which is currently under construction. The combined annual purchase volume will reach 900,000 tons, making ConocoPhillips the largest single buyer of LNG from the Port Arthur project.

Sempra is developing the Port Arthur project through its subsidiary and is planning to make a final investment decision on the expansion phase. The project has recently received an export license from the Trump administration, which had previously promised to expedite the approval of energy export projects. However, the project still requires financial commitments from banks and financial institutions to support the substantial construction costs of the new LNG export facilities.

The Port Arthur LNG project's first phase is planned to have an annual capacity of 1.35 million tons, which will double after the expansion. In late July, a Japanese energy company also signed an agreement to purchase 150,000 tons of LNG annually from the project's expansion phase. A major Saudi Arabian energy company has also reached a non-binding agreement with the Port Arthur expansion project.

ConocoPhillips has been involved in the LNG market for some time, primarily through its Australian projects, which supply LNG to Asia. However, its involvement in the U.S. LNG market is relatively new. During the shale gas boom over a decade ago, ConocoPhillips did not sign any long-term contracts for the initial U.S. LNG projects. As a major producer of unconventional natural gas assets in the U.S., the company is now exploring new international markets alongside competitors such as ExxonMobil and Chevron.

ConocoPhillips holds a 30% stake in the Port Arthur LNG project's first phase but has clarified that it will only participate in the gas procurement for the expansion phase. This strategic move underscores ConocoPhillips' commitment to expanding its LNG portfolio and capitalizing on the growing global demand for natural gas. The company's increased investment in the Port Arthur LNG project reflects its confidence in the future of the LNG market and its determination to play a leading role in meeting the world's energy needs.