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By Pooja Menon
Aug 21 (Reuters) – U.S. oil and gas producer ConocoPhillips (COP.N) said on Thursday it would secure 4 million tonnes per annum of liquefied natural gas from Sempra’s (SRE.N) Port Arthur LNG Phase 2 project in Texas to serve key global markets.
Commercial activity in the U.S. LNG sector has picked up pace after President Donald Trump lifted a moratorium on new liquefied natural gas export permits soon after taking office in January.
ConocoPhillips will buy LNG over a 20-year term on a free-on-board basis, the company said in a statement.
The United States is the world’s largest LNG exporter, with a total capacity that is expected to reach 115 million metric tons per annum this year, according to the U.S. Energy Information Administration.
“The role of U.S. LNG in meeting the energy security needs of America’s allies continues to grow,” said Sempra CEO Jeffrey Martin.
He said the expansion would connect American producers with global markets and support economic growth at home.
Sempra’s Port Arthur Phase 2 project won U.S. approval in May to export LNG to markets in Europe and Asia.
ConocoPhillips’ CEO Ryan Lance said the new contract advances the company’s global LNG strategy by building a “flexible and reliable LNG supply network” to meet rising demand.
“We expect more natural gas supply deals from the industry tied to LNG and data center demand growth. These deals will provide pricing upside and the potential for incremental natural gas growth in the coming years,” said Gabriele Sorbara, analyst at Siebert Williams Shank.
In 2022, ConocoPhillips signed a 20-year deal for 5 MTPA of LNG offtake and executed an agreement to purchase a 30% equity stake in Phase 1 of Port Arthur LNG, which is expected to start operations in 2027.
A final investment decision on Phase 2 is targeted for later this year.
Reporting by Pooja Menon in Bengaluru; Editing by Pooja Desai
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