ConocoPhillips gains additional interest in Australia Pacific LNG

ConocoPhillips closed a deal to acquire an additional 10% interest in Australia Pacific LNG (APLNG) from Origin Energy Ltd. for $1.645 billion. After customary closing adjustments, cash paid for the additional interest is about $1.4 billion.

The project, in Gladstone, Queensland, has nameplate capacity of 9 million tonnes/year and supplies LNG to long-term buyers in both China and Japan. It is currently the largest supplier of natural gas to Australia’s East coast domestic market, meeting over 30% of its total demand.

ConocoPhillips’ full-year 2021 production from APLNG was 113,000 boe/d and full-year 2021 financial distributions were about $750 million.

Both companies retain their existing seats on the APLNG board. Origin remains upstream operator of the project, responsible for the upstream exploration, development, and production activities. ConocoPhillips operates the downstream LNG export infrastructure and the LNG export sales business.

APLNG preemption

In December 2021, ConocoPhillips’ Australian subsidiary notified Origin Energy that it would exercise its preemption right to purchase up to an additional 10% shareholding interest in APLNG following EIG’s attempt to acquire 10% interest in the project (OGJ Online, Oct. 25, 2021; Dec. 8, 2021). That deal received approval from the Australian Foreign Investment Review Board but was subject to the waiving of preemptive rights by ConocoPhillips and Sinopec.

The APLNG joint venture shareholders now comprise ConocoPhillips (47.5%), Origin (27.5%), and Sinopec (25%).