Cheniere, Equinor in long-term LNG deal
By Jack Burke23 June 2023
Agreement expected to support Sabine Pass expansion project
Cheniere Energy’s subsidiary, Cheniere Marketing, has entered into a long-term liquefied natural gas (“LNG”) sale and purchase agreement with Equinor ASA.
Under the agreement, Equinor has agreed to purchase approximately 1.75 million tonnes per annum (“mtpa”) of LNG from Cheniere Marketing on a free-on-board (“FOB”) basis for a purchase price indexed to the Henry Hub price, plus a fixed liquefaction fee. Delivery of half of the volume associated with the SPA will commence in 2027, and delivery of the remaining half, which is subject to, among other things, a positive Final Investment Decision with respect to the first train of the Sabine Pass Liquefaction Expansion Project (“SPL Expansion Project”), will commence at the end of this decade. The term of the SPA is 15 years from the commencement of delivery of the full 1.75 mtpa of LNG volumes.
“We are pleased to expand our relationship with Equinor, one of Europe’s leading energy companies, building upon the SPA we executed last year,” said Jack Fusco, Cheniere’s President and Chief Executive Officer. “This SPA underscores Cheniere’s and Equinor’s shared vision of an energy future built upon reliable, flexible, and cleaner energy solutions. This SPA is expected to provide further commercial support to the SPL Expansion Project, which we continue to rigorously develop in order to meet the world’s growing demand for secure, long-term energy supplies and the economic and environmental benefits of Cheniere’s LNG.”
The SPL Expansion Project is being developed to include up to three natural gas liquefaction trains with an expected total production capacity of approximately 20 mtpa of LNG. In May 2023, certain subsidiaries of Cheniere Energy Partners, L.P. (NYSE American: CQP) entered the pre-filing review process with respect to the SPL Expansion Project with the Federal Energy Regulatory Commission under the National Environmental Policy Act.