“We have been constructive on LNG demand and pricing for some time—we view LNG as the part of the energy complex that will grow the most and expect demand to roughly double between now and 2050.”

In context

“Andrew O'Brien (President and Chief Executive Officer-designate / Chief Financial Officer and Executive Vice President, Strategy and Commercial): Morning, Betty. We added another two million tonnes of offtake—one in Indonesia off the Bontang North Hub field and one on the Gulf Coast. Stepping back on strategy, the majority of our offtake comes from the Gulf Coast and we have positioned ourselves to have low-cost supply with low liquefaction fees; most of that is Gulf Coast. Adding some Pacific Basin supply supplements that portfolio and was always part of our strategy. We do not expect a large share in the Pacific Basin, but having some Pacific supply is beneficial for commercial flexibility—optimization, substitution and diversion decisions. Regarding fundamentals, prices are constructive right now. We have been constructive on LNG demand and pricing for some time—we view LNG as the part of the energy complex that will grow the most and expect demand to roughly double between now and 2050. Low-cost supply wins in LNG as in E&P, and we are building a competitive portfolio with low liquefaction fees. Over the long run, we expect significant cash flow from these assets, though volatility will exist. Price risk is asymmetric to the upside. As context, every $1/mmBtu of margin on a 5 Mtpa position is about $200 million of cash flow for us. As we build to 10–15 Mtpa, those margins become a very material cash flow engine for ConocoPhillips and an important part of the energy complex for us to have significant exposure to.”