EPIC Crude Pipeline Owners Consider $3 Billion Sale

The owners of the EPIC Crude pipeline are considering a $3 billion sale. The pipeline is a major conduit for oil from the Permian and Eagle Ford basins in Texas to export facilities on the U.S. Gulf coast. The sale would be a significant transaction in the energy infrastructure sector.

ConocoPhillips (NYSE: COP) has expanded its liquefied natural gas (LNG) portfolio with a 20-year agreement to secure 4 million tonnes per annum (MTPA) of LNG from the Port Arthur LNG Phase 2 project. The deal, signed with Sempra Infrastructure, a subsidiary of Sempra (NYSE: SRE), further cements ConocoPhillips' position in the global LNG market.

The agreement, which covers a 20-year term, ensures that ConocoPhillips will offtake LNG on a free-on-board (FOB) basis, providing flexibility in shipping and distribution. This strategic move aligns with ConocoPhillips' broader strategy of developing a reliable and flexible global LNG supply portfolio to meet the evolving energy needs of international customers.

Ryan Lance, chairman and CEO of ConocoPhillips, highlighted the significance of the deal, stating, "ConocoPhillips is pleased to extend our partnership with Sempra Infrastructure to Port Arthur LNG Phase 2, where we will be a major offtaker." He emphasized that the deal supports the company’s broader strategy of developing a reliable and flexible global LNG supply portfolio.

Jeffrey W. Martin, chairman and CEO of Sempra, underscored the importance of the expanded collaboration, noting that U.S. LNG is playing an increasingly vital role in meeting the energy security needs of American allies. He added that expanding the Port Arthur LNG project through Phase 2 demonstrates both companies’ shared vision of connecting U.S. natural gas producers with growing overseas demand. Beyond energy exports, Martin highlighted the project's contribution to local economic growth and job creation in Texas.

This latest move builds on ConocoPhillips' existing involvement in the Port Arthur LNG development. In July 2022, the company signed another long-term deal for 5 MTPA of LNG from Phase 1 of the same project and acquired a 30% equity stake. While the final investment decision for Phase 2 has not yet been taken, ConocoPhillips' role in that stage will be limited to LNG offtake rather than direct equity participation.

The sale of the EPIC Crude pipeline, a major conduit for oil from the Permian and Eagle Ford basins in Texas to export facilities on the U.S. Gulf coast, is also being considered. The potential $3 billion sale would be a significant transaction in the energy infrastructure sector.

The latest developments in ConocoPhillips' LNG portfolio and the potential sale of the EPIC Crude pipeline underscore the dynamic nature of the energy sector, where strategic partnerships and infrastructure investments play a crucial role in meeting global energy demands.

References:
[1] https://www.chemanalyst.com/NewsAndDeals/NewsDetails/conocophillips-strengthens-lng-portfolio-with-new-gulf-coast-offtake-deal-38741