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HOUSTON - ConocoPhillips (NYSE:COP), a prominent player in the Oil, Gas & Consumable Fuels industry with a market capitalization of $114 billion and annual revenue of $59.4 billion, has signed a long-term sales and purchase agreement to purchase 1 million tonnes per annum (MTPA) of liquefied natural gas from NextDecade Corporation’s (NASDAQ:NEXT) Rio Grande LNG project in Texas, the company announced Monday. According to InvestingPro analysis, the company is currently trading near its Fair Value, with strong financial health metrics.
The 20-year agreement is subject to NextDecade making a positive final investment decision on Train 5 of the Brownsville facility. Under the terms, ConocoPhillips will receive LNG on a free-on-board basis. The company’s strong financial position, evidenced by its moderate debt levels and 55-year track record of consecutive dividend payments, positions it well for such long-term commitments.
"We’re excited to help move this project closer to FID while advancing our global LNG portfolio strategy and 10 to 15 MTPA offtake ambition," said Khoa Dao, chief commercial officer for ConocoPhillips.
The Rio Grande facility will utilize ConocoPhillips’ OCP CryoSep technology for heavy hydrocarbon removal from feed gas. This technology provides targeted recovery of heavy hydrocarbons that would otherwise freeze or lead to high BTU content in LNG.
This agreement follows ConocoPhillips’ recent expansion of its LNG portfolio through offtake agreements with Port Arthur LNG, including 4 MTPA from Phase 2 and 5 MTPA from Phase 1.
The announcement represents another step in ConocoPhillips’ efforts to build a more diversified LNG supply network as global energy demand continues to grow.
The information in this article is based on a company press release statement.
In other recent news, ConocoPhillips reported that it exceeded second-quarter earnings expectations by approximately 3% compared to consensus estimates, with production surpassing Street forecasts by the same margin. The company is set to reduce its workforce by 20-25%, as confirmed by a company spokesperson. In a strategic move, ConocoPhillips has signed a 20-year agreement with Sempra Infrastructure to purchase 4 million tonnes per annum of liquefied natural gas from the Port Arthur LNG Phase 2 project in Texas. This agreement builds on their existing partnership, as ConocoPhillips already holds a 30% equity stake and 5 Mtpa in offtake capacity from Phase 1 of the project.
Raymond James has adjusted its price target for ConocoPhillips to $115, down from $117, while maintaining an Outperform rating due to changes in commodity prices. Additionally, Melius Research has initiated coverage on ConocoPhillips with a Hold rating and a price target of $117. These developments reflect ongoing strategic adjustments and market evaluations impacting ConocoPhillips.
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