ConocoPhillips finalizes agreement with Freeport LNG for Texas terminal

ConocoPhillips said July 6 that it has finalized its transaction with Freeport LNG Development L.P. to participate in the proposed liquefied natural gas receiving terminal in Quintana, Brazoria County, Texas.

ConocoPhillips said it has acquired 1 billion cubic feet per day of regasification capacity in the terminal, has obtained a 50 percent interest in the general partner managing the venture and will provide substantial construction funding to the venture. Michael S. Smith owns the other 50 percent of Freeport LNG Development.

The Federal Energy Regulatory Commission approved the facility June 18, and receipt of all other necessary federal, state and local approvals is expected in the third quarter, ConocoPhillips said, with construction scheduled to begin in the fourth quarter and commercial startup planned for the second half of 2007.

The Freeport LNG terminal will have a storage capacity of nearly 7 bcf and send-out capacity of 1.5 bcf per day. Natural gas from the facility will be transported through a 9.4-mile pipeline to Stratton Ridge, Texas, a major point of interconnection with the Texas intrastate gas pipeline system.

ConocoPhillips said the current management of Freeport LNG will remain in place and will oversee the commercial activities of the partnership, while ConocoPhillips will provide leadership for management of construction and operation of the facility.

“This project is a critical link for the development of one or more of several LNG projects under consideration by ConocoPhillips,” Sig Cornelius, president of ConocoPhillips Global Gas, said in a statement.

ConocoPhillips already operates refining, chemical and transportation businesses in Brazoria County, Texas.