Houston-based ConocoPhillips plans on boosting its LNG offtake capacity to between 10 million tonnes per annum (mtpa) to 15 mtpa over the long-term future, while keeping an eye on an auction of Citgo Petroleum as it seeks compensation for assets expropriated in Venezuela.

Growing its offtake capacity will allow ConocoPhillips “to achieve the full benefits of scale across our organization,” said Andrew O’Brien, ConocoPhillips’ senior vice president of strategy, commercial, sustainability and technology, on May 2 during the company’s first quarter 2024 webcast. “I do want to be clear, this is an offtake ambition. We don't feel that we have to take on additional liquefaction capital.”

O’Brien said ConocoPhillips’ offtake positions in North America totaled 7.4 mtpa pending a final investment decision (FID) at Saguaro LNG. The company has 5 mtpa of offtake at Port Arthur, while on Mexico’s West Coast it has 2.2 mtpa at Saguaro and 0.2 mtpa for five years starting in 2025 at ECA Phase 1.

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On the regasification side, ConocoPhillips has 4.5 mtpa secured in Europe, which includes 2.8 mtpa at German LNG as well as 1.7 mtpa at the gate terminal in the Netherlands, O’Brien said, adding that the near-term focus was “on continuing to ladder in the regas opportunities.”

ConocoPhillips Chairman and CEO Ryan Lance reiterated during the webcast that the company wants to continue to grow its LNG exposure.

“And it's really participating in all facets of it, the production side here in North America, in Qatar, in Australia, being in the liquefaction side here in North America and elsewhere being having ships and being in the regas potential as well,” Lance said.

“So, trying to grow that integrated business as well, even at sort of the lower Henry Hub prices you see today, the [arbitrage] is still open to make money and make a decent rate of return as you move some of that LNG to Europe and to Asia,” Lance said. “It’s a long-term business that we’re interested in.”

Lance said it was important for ConocoPhillips to be in the right regions to benefit.

“We want to make sure we're in the right spots with the right kinds of opportunity and certainly, North America is a great spot, both on the Gulf Coast and on the West Coast, if there's some good opportunities. It's about having the best liquefaction fees. It's about the better projects that we see out there,” Lance said.

While the U.S. has surpassed Qatar in liquefaction capacity, the Middle Eastern country continues to move forward with plans to significantly boost its capacity and keep the heat on LNG exporters.

“When it comes to Qatar, we've demonstrated where we've landed a couple of interests in a couple of trains there in North Field East (NFE) and North Field South (NFS), and if they put more out there [and] the terms are acceptable and competitive, we're certainly interested in expanding that relationship with Qatar down the road,” Lance said.

All eyes on Citgo

ConocoPhillips continues to watch the drama around the auction of Citgo Petroleum, the U.S. refining affiliate of Venezuela’s state-owned Petróleos de Venezuela (PDVSA)—and for good reason.

The company is more concerned about the debt its owed by Venezuela than adding a refining arm to its portfolio.

“We're watching that process. Look, we're a creditor in that process. So, we're owed quite a bit of money by the Venezuelans,” Lance said in response to an analyst question.

“We're not trying to become an integrated refining major with … refining in our portfolio. This is the way to protect what's owed the company and the credit that we have against the Venezuelan government,” Lance said.

ConocoPhillips’ assets in Venezuela were expropriated in the OPEC country during the tenure of late Venezuelan president Hugo Chavez Frias.

“So, we're watching that and following that process pretty closely, but that's to get the money that they owe us for the judgments that we have against the Venezuelan government for the expropriation of our assets,” Lance said.