ConocoPhillips Beefs Up Stake in Australia Pacific LNG

ConocoPhillips has completed the acquisition of an additional 10% stake in Australia Pacific LNG (APLNG) from Origin Energy for $1.645 billion. 

After customary closing adjustments, cash paid for the additional interest is approximately $1.4 billion (AU$2.0 billion). The transaction resulted from the exercise of ConocoPhillips’ preemption right and is funded from cash on the company’s balance sheet.

ConocoPhillips now owns a 47.5% interest in APLNG, with Origin Energy and Sinopec owning 27.5% and 25% interests, respectively. B

ased on the new 47.5% ownership interest and a full-year average Brent price of $78 per barrel, ConocoPhillips would expect approximately $1.8 billion of distributions from APLNG in 2022, with roughly $0.5 billion expected in the first quarter, the company said.

“We are pleased to acquire this additional stake in APLNG, which throughout its six years of operations has served as a reliable and efficient supplier of natural gas to the growing Asia Pacific market, and to Australia’s East Coast gas market,” said Ryan Lance, ConocoPhillips chairman and chief executive officer. 

“With the global energy transition underway, we expect LNG to play an increasingly important role, as it is lower in greenhouse gas emissions intensity than other alternatives. At the same time, this strategic acquisition of an additional shareholding interest in APLNG further diversifies our product mix while lowering our aggregate decline rate.”

ConocoPhillips’ full-year 2021 production from APLNG was 113 thousand barrels of oil equivalent per day (MBOED) and full-year 2021 financial distributions were approximately $750 million. The sensitivities provided on Feb. 3, 2022, reflect the company’s increased interest in APLNG.

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