Rio Grande LNG Cuts Deal with ConocoPhillips, FID Comes Next

We have a second "producer does a deal to buy (not sell) LNG" story today. ConocoPhillips, a huge oil-focused driller, announced a deal to buy 1.0 million tonnes per annum (MTPA) of liquefied natural gas (LNG) from the Rio Grande LNG project. How does this news tie into the Marcellus/Utica? It doesn't do so directly, but it does so indirectly. First, this deal shows that EQT is not the only driller to move into the role of LNG trader. Others are now doing it, too. A trend? Second, EQT signed its own deal with Rio Grande for 1.0 MTPA of LNG just last week (see EQT Announces Deal to *Buy* LNG from Rio Grande LNG Train 5). Because of these two deals (EQT and ConocoPhillips), Rio Grande announced it now has enough commitments to move forward with a final investment decision (FID) to build the project.

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