ConocoPhillips expands LNG ambitions with new Gulf Coast offtake deal
ConocoPhillips has taken another significant step in its bid to expand its liquefied natural gas (LNG) business, signing a fresh 20-year sales and purchase agreement with Sempra Infrastructure for supply from the planned second phase of the Port Arthur LNG project in Texas.
Under the deal, ConocoPhillips will take delivery of 4 million tonnes per annum (MTPA) of LNG from Port Arthur Phase 2, which is still awaiting a final investment decision later this year. Deliveries will be made on a free-on-board basis, giving the company flexibility to direct cargoes to whichever market offers the most strategic value.
The agreement builds on ConocoPhillips’ growing presence in the LNG sector, particularly along the US Gulf Coast. In 2022, the Houston-based producer signed a separate 20-year contract for 5 MTPA from Port Arthur Phase 1 and simultaneously acquired a 30% equity stake in that initial stage of the project. Phase 1 is under construction and is expected to enter service in 2027. Unlike its earlier deal, however, the new agreement involves no equity participation, making it an offtake arrangement only.
Ryan Lance, chairman and chief executive of ConocoPhillips, said the move underscores the company’s strategy to build “a flexible and reliable LNG supply network” that can serve a range of markets across Asia and Europe. He argued that long-term access to US LNG was vital for customers navigating volatile energy markets and the ongoing global transition.
Jeffrey W. Martin, chairman and chief executive of Sempra, welcomed the expanded partnership, highlighting the central role of US LNG exports in supporting both domestic economic growth and international energy security. “By linking American natural gas producers with customers overseas, projects like Port Arthur provide a bridge between local communities and global markets,” he said, pointing to the thousands of jobs and billions of dollars in investment tied to the venture.
The Port Arthur LNG project, located in Jefferson County on the Texas coast, is designed to become one of the largest export facilities of its kind in North America. Phase 1 alone is expected to produce 13.5 MTPA of LNG once fully operational, with Phase 2 potentially matching or exceeding that scale. Combined, the development could transform the site into a cornerstone of US LNG exports.
The latest offtake deal also reflects a broader shift in ConocoPhillips’ global strategy. Once primarily an upstream oil and gas producer, the company has in recent years been moving decisively into LNG as demand for lower-carbon fuels grows. By securing long-term supply without necessarily tying up capital in infrastructure, ConocoPhillips positions itself to compete aggressively in the global LNG trade while maintaining financial flexibility.
For importing nations, particularly in Europe and Asia, agreements such as this are increasingly viewed as insurance against supply shocks. The surge in LNG demand following the disruption of Russian pipeline gas supplies has underscored the importance of reliable export capacity from the United States, now the world’s largest LNG producer.
A final investment decision on Port Arthur Phase 2 is anticipated before the end of 2025. If approved, construction would extend into the late 2020s, creating further export volumes for ConocoPhillips to market internationally. Together, Phase 1 and Phase 2 would solidify the Gulf Coast’s status as one of the most critical energy hubs in the world, with ConocoPhillips embedded at its centre.
