ConocoPhillips believes that a secure and sustainable energy future depends on utilizing a diverse mix of energy sources that are reliable, available and environmentally responsible.
Liquefied Natural Gas
ConocoPhillips is a pioneer in the liquefied natural gas (“LNG”) industry with more than 40 years of experience in safely producing and delivering LNG in the Asia Pacific region. Starting in 1969 with supplies from ConocoPhillips’ Kenai Alaska LNG plant, the first LNG plant to service the Asia Pacific market, ConocoPhillips is now involved in projects that are linked to the LNG value chain in several countries around the world.
Working with China’s national energy companies, ConocoPhillips is progressing opportunities to bring LNG into China to meet the country’s demand for clean energy and to help diversify China’s energy sources. Through the implementation of these opportunities, China will become the largest and most important single market outlet for ConocoPhillips’ LNG activities.
In April 2011, Sinopec joined ConocoPhillips and Origin Energy in a world-class LNG project in Australia, called Australia Pacific LNG (“APLNG”). This marked an important step in bringing cleaner energy to China. APLNG’s integration of sustainable environmental practices further reinforces ConocoPhillips’ commitment to sustainable development.
As part of the agreement, Sinopec took a 15 percent equity interest in APLNG, and agreed to buy the entire 4.6 million tons per year of LNG from the first production train for 20 years. Building rapidly on the success of this partnership, in January 2012, Sinopec increased its purchase of LNG from APLNG by an additional 3.0 million tons per year from a second production train, and in July 2012, increased its equity interest in APLNG to 25 percent. Via these LNG sales contracts, APLNG will now be providing 7.6 million tons of LNG annually to the energy markets of coastal China. Deliveries will begin in 2015.
The 7.6 million tons per year of LNG that the APLNG project will provide to the Chinese energy market will reduce the amount of greenhouse gas emissions by around 30 million tons per year when compared to a similar energy output fueled by coal, with virtually none of the sulfur, ash, or other pollutants that are typically generated from coal burning.
Besides clean energy importation projects, ConocoPhillips continues to seek opportunities to bring its technology and experience in the exploration and development of unconventional hydrocarbons such as coal bed methane, tight gas and shale gas to benefit and assist China in opening up its complex onshore gas reserves.
Over the past few years, ConocoPhillips has become one of the leaders of shale development in North America. With the cooperation of national energy companies, the government and other stakeholders, we hope to advance significant projects that will assist China in its goal of providing clean, long-term, sustainable energy for the country. ConocoPhillips is working closely with these stakeholders to make these projects a reality and assist China in its transition to a cleaner energy economy.
In December 2012, ConocoPhillips China signed a joint study agreement on Qijiang shale gas block with Sinopec and, in February 2013, entered into another joint study agreement in the Neijiang-Dazu shale gas block with PetroChina in the Sichuan Basin. These joint studies will be an important step in evaluating the potential for unconventional resource exploration in the area.