Houston-based ConocoPhillips (NYSE: COP) became the largest owner of a liquefied natural gas terminal in Australia with the closing of a $1.645 billion deal on Feb. 17.
The oil and gas producer purchased an additional 10% interest in Australia Pacific LNG from Sydney, Australia-based Origin Energy, acting on a previously determined right to expand its interest in the project. The acquisition was first announced in early December.
After closing adjustments, ConocoPhillips paid $1.4 billion in cash, all from its balance sheet, for the expanded stake in APLNG. Based on its new ownership stake, the company said it expected to receive $1.8 billion in revenue from the terminal in 2022.
ConocoPhillips now owns 47.5% of APLNG. Joint venture partners Origin Energy and Beijing-based Sinopec Ltd. hold 27.5% and 25% interests in the terminal, respectively.
Each party plays a distinct role in the liquified natural gas export terminal, which loaded its first cargo in January 2016.
Origin Energy operates the gas fields and main transmission pipeline leading into the terminal, according to the APLNG website. ConocoPhillips built and now operates the two-train facility in Queensland in eastern Australia, on the coast of the Coral Sea. And Sinopec is one of APLNG’s biggest customers.
Most of the gas Origin produces for APLNG originates from coal fields. Some of the gas Origin produces in the nearby fields stays on the continent for sale in the Australian gas market, and the rest is fed into APLNG’s two liquefaction trains, each of which has an annual capacity of 4.5 million tons, according to the companies.
The Houston company’s involvement in Australian LNG dates back decades. ConocoPhillips started up the Darwin LNG export facility, a single train with an annual capacity of 3.7 million tons, in 2005, but sold that majority stake in May 2020. Adelaide, Australia-based oil and gas producer Santos bought the 56.9% interest in Darwin LNG, along with interest in some production fields in the region, for $1.39 billion.
In 2018, ConocoPhillips also sold the aging Kenai LNG terminal, built in Alaska in 1969, to San Antonio-based refiner Andeavor, which was later acquired by Ohio-based Marathon Petroleum Corp. (NYSE: MPC).
ConocoPhillips also owns 30% of an LNG terminal called QG3 in Ras Laffan, Qatar, which has an annual capacity of 7.8 million tons, according to the company’s annual report filed with the U.S. Securities and Exchange Commission.
