ConocoPhillips Makes Headway on Natural Gas Projects in Texas and Alaska as it Trims Capital Spending

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Researched by Industrial Info Resources (Sugar Land, Texas)--Stabilizing oil prices have given ConocoPhillips (NYSE:COP) (Houston, Texas) room to recover as the company continues to sell off its less profitable assets and develop its more promising properties, particularly in Alaska and along the Texas Gulf Coast. Industrial Info is tracking more than $72 billion in active projects involving ConocoPhillips worldwide, including those related to the Eagle Ford Shale and Permian Basin in Texas and the Alpine Oil & Natural Gas Central Processing Plant in Alaska.

Like Exxon Mobil Corporation (NYSE:XOM) (Irving, Texas) and Chevron Corporation (NYSE:CVX) (San Ramon, California), which also reported recently, ConocoPhillips benefited from stronger commodity prices that returned it to the black: Net income stood at $777 million, including special items, compared with a loss of $1.47 billion in first-quarter 2016. And like the other Oil & Gas giants, its profits were attributed in part to dramatically reduced capital expenditures, which stood at $948 million for the quarter, a little more than half of what was spent in the same period last year.

ConocoPhillips also sold much of its oil sands and western Canadian natural gas assets to Cenovus Energy Incorporated (NYSE:CVE) (Calgary, Alberta), including its 50% interest in the Foster Creek/Christina Lake Partnership, now fully owned by Cenovus. The sales accounted for a significant part of ConocoPhillips' earnings; excluding them and other special items, the company saw a loss of $1.2 billion for the quarter. For more information, see April 10, 2017, article - Cenovus Closer to Taking Top Spot in Canadian Thermal Production as Deal with ConocoPhillips Progresses, and April 14, 2017, article - ConocoPhillips Continues Asset Selloff with San Juan Basin Deal.

Production for the first quarter of 2017 was 1.58 million barrels of oil equivalent per day (excluding Libya), an increase of 6 million barrels from first-quarter 2016. Production ramped up on several major projects and well performance improved, including in the Eagle Ford Shale and Permian Basin in Texas, where rig counts increased. Gas from the Eagle Ford Shale is expected to fuel ConocoPhillips' Freeport LNG Liquefaction and Export Plant in Quintana, Texas, one of the country's most closely watched liquefied natural gas (LNG) export projects. The $5.5 billion first train is scheduled to begin service in 2018, and the $5.5 billion second and $4.5 billion third trains in 2020.

Industrial Info also is following the proposed, $4.5 billion Train IV, $200 million natural gas pretreatment plant and $90 million natural gas-fired unit addition at Freeport. For more information, see Industrial Info's project reports on Train I, Train II, Train III, Train IV, the pretreatment plant and the natural gas unit addition.

Also in Texas, ConocoPhillips is weighing the possibility of a third train at the Mont Belvieu NGL Fractionation complex in Mont Belvieu, Texas. The project, still in its analytical phase, would boost the site's natural gas fractionation capacity from 145,000 BBL/d to about 190,000 BBL/d. For more information, see Industrial Info's project report.

Construction continued at ConocoPhillips' $900 million Greater Moose's Tooth Unit 1 addition at the Alpine Oil & Natural Gas Central Processing Plant in Nuiqsut, Alaska, where the drill site was prepared for startup and a seismic survey was completed. The massive project includes the construction of a new well pad with eight wells, with the longer-term goal of 33 production and injection wells, and a gathering pipeline with a capacity of 20,000 to 25,000 BBL/d, as well as a 350-foot bridge and a 7.7-mile road. The company also is weighing a $1 billion Greater Moose's Tooth Unit 2 addition, which, as proposed, would add another 19 wells. For more information, see Industrial Info's project reports on Unit 1 and Unit 2.

Second-quarter production is expected to be lower at 1,495 to 1,535 million barrels of oil-equivalent per day, excluding Libya, which does not reflect impacts from the Canadian dispositions.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.