ConocoPhillips (COP) to Acquire Additional Stake in APLNG
ConocoPhillips COP plans to acquire an additional stake in Australia Pacific LNG (“APLNG”) from a subsidiary of institutional investor EIG.
ConocoPhillips currently holds a 47.5% stake in the APLNG project. The company operates the 9-metric-ton-per-annum LNG export facility on Curtis Island near Gladstone. Origin Energy, the current upstream operator, owns a 22.5% stake.
ConocoPhillips agreed to acquire up to an additional 2.49% interest in APLNG for $500 million, subject to customary adjustments. Once the transaction closes, the energy giant will own up to 49.99% stake and become the upstream operator of APLNG.
APLNG is currently the largest natural gas supplier of Australia’s East Coast domestic market. APLNG addresses about 20-30% of the region’s total demand. In January 2016, the facility shipped its first LNG cargo after five years of development and construction.
In 2022, ConocoPhillips produced about 136 thousand barrels of oil equivalent per day from APLNG. The facility will continue supplying customers in China and Japan with reliable energy, lower in carbon intensity than other fossil fuel alternatives.
ConocoPhillips owns several LNG assets all over the world, through which it can make significant profits during this rising demand for cleaner energy sources. The transaction, subject to Australia regulatory approvals and other customary closing conditions, is expected to close in early 2024.
Shares of COP have outperformed the industry in the past six months. The stock has declined 6% compared with the industry’s 10.4% fall.
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Zacks Rank & Stocks to Consider
ConocoPhillips currently carries a Zack Rank #3 (Hold).
Investors interested in the energy sector might look at the following companies that presently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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