ConocoPhillips Co. completed the purchase of an additional 10% shareholding interest in Australia Pacific LNG (APLNG) from Origin Energy for $1.645 billion, according to a Feb. 17 release from the Houston-based independent oil and gas firm.

APLNG, a JV between Origin, ConocoPhillips and Sinopec, is the largest producer of natural gas in eastern Australia and a major exporter of LNG to Asia. ConocoPhillips’ Australian subsidiary now owns a 47.5% interest in APLNG, with Origin Energy and Sinopec owning 27.5% and 25% interests, respectively. The transaction resulted from the exercise of ConocoPhillips’ preemption right and is funded from cash on the company’s balance sheet.

“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,” Ryan Lance, ConocoPhillips chairman and CEO, commented in the release.

Based on the new 47.5% ownership interest and a full-year average Brent price of $78/bbl, ConocoPhillips would expect approximately $1.8 billion of distributions from APLNG in 2022, with roughly $500 million expected in the first quarter.

“With the global energy transition underway,” Lance continued, “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.”

After customary closing adjustments, cash paid for the additional interest in APLNG is approximately $1.4 billion (AU$2 billion).

ConocoPhillips’ full-year 2021 production from APLNG was 113,000 boe/d and full-year 2021 financial distributions were approximately $750 million. The sensitivities provided on Feb. 3, reflect the company’s increased interest in APLNG.

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