US energy giant ConocoPhillips, through its Australian subsidiary, has revealed plans to become upstream operator of Australia Pacific LNG (APLNG) following the closing of EIG’s transaction with Origin Energy.
ConocoPhillips announced its plans on 27 March stating it has agreed to purchase up to an additional 2.49% shareholding interest in APLNG for $0.5 billion, subject to customary adjustments.
The company currently holds a 47.5% APLNG shareholding interest and will own up to 49.99% of APLNG upon closing. According to ConocoPhillips, the transaction is expected to close in early 2024 and the effective date of the transaction will be 1 July 2022.
Both the assumption of upstream operatorship and the shareholding acquisition are dependent on EIG closing its transaction with Origin. EIG’s transaction with Origin and ConocoPhillips’ shareholding acquisition are subject to Australian regulatory approvals and other customary closing conditions, the company explained.
“We are pleased to have the opportunity to become upstream operator and increase our ownership in APLNG. Origin pioneered the development of coal seam gas into LNG and has contributed to APLNG’s status as a safe and dependable LNG supplier. We look forward to leveraging our global upstream expertise to further enhance APLNG as a world-class integrated LNG operation”, said Andy O’Brien , Senior Vice President, Global Operations.
“APLNG is currently the largest supplier of natural gas to Australia’s East Coast domestic market, meeting between 20-30% of its total demand. It will continue supplying customers in China and Japan with reliable energy that is lower in GHG intensity than other fossil fuel alternatives, and thus help meet energy transition pathway demand for years to come.”
ConocoPhillips’ full-year 2022 production from APLNG was approximately 136 thousand barrels of oil equivalent per day (MBOED).
APLNG is a joint venture between ConocoPhillips (47.5%), Origin Energy (27.5%), and Sinopec (25%). The facility shipped its first LNG cargo in January 2016 after nearly five years of development and construction.