Cheniere inks LNG sale and purchase deals with Chevron

U.S. energy companies Cheniere Energy and Chevron have entered into two long-term LNG sale and purchase agreements (SPA) for combined two million tonnes per annum (mtpa) of LNG.

Cheniere’s subsidiaries Sabine Pass Liquefaction (SPL) and Cheniere Marketing each entered into long-term LNG SPA with Chevron U.S.A., a wholly-owned subsidiary of Chevron Corporation. Therefore, Chevron will purchase a combined 2.0 mtpa of LNG from Cheniere subsidiaries, subject to certain conditions.

Under the first SPA, Chevron will purchase approximately one mtpa of LNG from SPL on a free-on-board (FOB) basis. Deliveries under the SPA will begin in 2026, reach the full 1 mtpa during 2027 and continue until mid-2042.

Under the second SPA, Chevron will buy approximately one mtpa of LNG from Cheniere Marketing on a FOB basis with deliveries beginning in 2027 and continuing for approximately 15 years. The Cheniere Marketing SPA is subject to Cheniere making a positive final investment decision to construct additional liquefaction capacity at the Corpus Christi LNG terminal beyond the seven-train Corpus Christi Stage 3 project. The purchase price for LNG under the SPAs is indexed to the Henry Hub price, plus a fixed liquefaction fee.

Additionally, Cheniere’s subsidiary, Sabine Pass LNG and Chevron agreed to terms for the early termination of their LNG terminal use agreement (TUA) in return for a lump-sum payment to be made by Chevron to SPLNG during the calendar year 2022. Termination of the TUA is subject to the consent of certain lenders to Cheniere Energy Partners expected during the third quarter of 2022.

Anatol Feygin, Cheniere’s executive vice president and CCO, said: “These long-term SPAs underscore the growing demand for reliable, cleaner-burning LNG supply beyond 2040 and further support investment in additional LNG capacity beyond our Corpus Christi Stage 3 Project.”

“Our strategy is to deliver lower carbon energy to a growing world,” said Colin Parfitt, Chevron vice president, Midstream. “Our agreements with Cheniere allow us to harness growing U.S. natural gas production and Gulf Coast LNG export capacity to help meet long-term demand for affordable, reliable, and ever cleaner energy.”