ConocoPhilips to further tap nation's green biz, growing LNG demand

United States oil and gas company ConocoPhillips said it is exploring opportunities to supply more liquefied natural gas from its current and future projects to the Chinese market for its growing demand for LNG.

"Regardless of the near-term uncertainty, our commitment to supplying LNG to China on a long-term basis will remain unchanged," said Bill Bullock, executive vice-president and chief financial officer of ConocoPhillips.

"Nearly 10 million metric tons per annum LNG from our worldwide joint venture projects has been shipped to China to support the country's energy transition goals since 2016. We delivered the first US LNG cargo from Alaska to China in 2011," Bullock said.

"With our growing LNG portfolio, we look forward to more cooperation opportunities that help meet China's growing energy demand and energy transition goals."

China led the world in LNG imports last year with nearly 80 million metric tons, up 19 percent from the year before. Such an amount of LNG represented 65 percent of China's overall natural gas imports, and 30 percent of its total natural gas supply in 2021.

ConocoPhillips expects LNG to play an increasingly important role in helping meet the energy transition pathway demand, as it is lower in greenhouse gas emissions intensity than other alternatives like coal.

China is expected to attract more international energy suppliers with its burgeoning natural gas demand and global energy behemoths are already stepping up their existing LNG business to expand their presence in the country, said Li Ziyue, an analyst with BloombergNEF.

"Global energy giants are showing a growing interest in China's robust LNG market," Li said.

"In addition to the signing of LNG sales and purchase agreements with Chinese companies, some international oil corporations have extended their cooperation ranging from participation in LNG receiving terminals to downstream LNG trading in the country."

China's LNG imports have been gaining momentum since 2016.However, due to the rising import prices, China's gas and LNG demand is expected to slow down in 2022, after solid growth in 2021.

China's LNG imports are set to fall over 14 percent year-on-year to 69 million tons this year, said energy research and consultancy Wood Mackenzie earlier.

Bill Arnold, president of ConocoPhillips China, said in addition to LNG, the company hopes to deliver more oil to China in the future, while the company has also been actively evaluating opportunities in larger offshore wind farms, power from shore, and carbon capture and storage in China.

The company, together with China National Offshore Oil Corp, has been progressing with the Penglai offshore wind farm pilot project, which will deliver wind power to Penglai, Shandong province, to reduce emissions and costs, Arnold said.

The project is a first-of-its-kind integration of offshore wind power for offshore oil and gas facilities in China, and we expect it will be the benchmark for future low-carbon emission and intelligent oilfield developments, ConocoPhillips China said.

"As one of the largest foreign investors in the upstream oil and gas sector in China, ConocoPhillips has been impressed with and has benefited from China's rapid economic growth during the past four decades," Arnold said.

"The visible efforts of Chinese policymakers in reforming the sector during the past few years are encouraging. We look forward to working together with our local partners to continue to drive forward the development of the industry."

Bullish on China's green market, the company's president in China said he believes "China will play a vital role in the global energy transition and the reform and opening-up efforts of the Chinese government will continue to enable ConocoPhillips to pursue new opportunities and help China to fulfill its growing energy needs".

Dominic Macklon, executive vice-president of strategy, sustainability and technology for ConocoPhillips, said, "Conoco-Phillips is planning to join the fifth China International Import Expo for the first time as an exhibitor this year.

"CIIE provides an important platform to promote greater collaboration and cooperation. We look forward to enhancing industry dialogues with multiple stakeholders in China."