ConocoPhillips eyes smaller LNG opportunities

US energy giant ConocoPhillips is pursuing smaller M&A opportunities.

A year after rumours surfaced that ConocoPhillips was eyeing the liquefied natural gas assets of Santos, deals could be back on the agenda.

DataRoom understands that mergers and acquisitions in the oil and gas industry remain on its radar, but at a different end of the market.

Speculation is mounting that the US energy giant is pursuing smaller M&A opportunities that will create more avenues to develop gas projects.

ConocoPhillips has a large team in Australia, and it is looking for promising projects.

Obvious targets include the Taroom Basin in Queensland, where the $127m listed Omega Oil and Gas has just landed some promising preliminary results from its Canyon gas field, sending its share price soaring since the start of the year, and off the coast of Victoria, where it already is drilling a well in the Otway Basin in the hope of supplying more gas to supply to the east coast market.

The Australian Competition & Consumer Commission is carrying out an inquiry into gas supply arrangements in Australia, with a focus on the east coast gas market.

This could lead to a focus on delivering more gas to the domestic market at a time of spiralling energy costs, say industry sources.

If operators develop more gas in Australia than can be sold domestically, they can probably sell the same volumes of gas overseas.

The US multinational ConocoPhillips owns 47.5 per cent of APLNG and there have been suggestions it is interested in GLNG and a merger with the APLNG business.

Santos owns 30 per cent of GLNG.

That deal hinged on EIG and Brookfield buying Origin Energy, but the private equity firms ­walked away from the $16bn proposal.

Earlier, sources suggested that the Kerry Stokes-backed Beach Energy could look at coal-seam gas opportunities on Australia’s east coast to create more scale across Australia’s east and west coasts.