Photo: Courtesy of Delfin LNG

Delfin and Devon Energy sign LNG export deal

LNG export infrastructure development company Delfin Midstream and U.S. oil and gas producer Devon Energy have entered into an LNG export partnership.

Delfin and Devon Energy sign LNG export deal
Courtesy of Delfin LNG

The partnership includes an executed heads of agreement (HOA) for long-term liquefaction capacity and a pre-financial investment decision (FID) strategic investment by Devon in Delfin.

The HOA provides the framework for finalizing a definitive long-term tolling agreement representing 1.0 million tons per annum (mtpa) of liquefaction capacity in Delfin’s first floating LNG vessel (FLNG), with the ability to add an additional 1.0 mtpa in Delfin’s first or a future FLNG.

In addition to providing Devon with up to 2.0 mtpa of total liquefaction capacity on a long-term basis, the HOA also provides an opportunity for additional future equity investments in Delfin by Devon.

“We are delighted to execute this agreement with Devon, representing a truly strategic partnership between a U.S. producer and a liquefaction provider,” said Dudley Poston, Delfin CEO. “We believe our unique liquefaction solution provides significant structural flexibility that allows producers to maximize the value of their natural gas, while providing a much-needed source of additional supply to the world LNG marketplace.”

“Our decision to invest in Delfin was the result of a thorough process intended to create additional
pricing diversification for our natural gas portfolio and deliver a sustainable and capital efficient
return for our shareholders,”
said Rick Muncrief, Devon’s CEO.

Following its recent announcement of a binding SPA with Vitol and an HOA with Centrica, this represents Delfin’s third major deal in the past two months. The company says it is also in numerous advanced discussions on additional binding SPAs, HOAs, and tolling agreements.

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As a modular project requiring only 2.0 to 2.5 mtpaA of long-term contracts to begin construction, and with all necessary permits in hand, Delfin is on schedule to make FID on its first FLNG vessel by the end of this year.