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Cheniere and EOG Resources sign long-term gas supply agreements

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Hydrocarbon Engineering,


Cheniere Energy, Inc. announced today that its subsidiaries, Corpus Christi Liquefaction, LLC and Cheniere Corpus Christi Liquefaction Stage III, LLC, have entered into long-term gas supply agreements (GSAs) with EOG Resources, Inc.

Under the GSAs, EOG has agreed to sell natural gas to Cheniere over a period of approximately 15 years beginning in early 2020, with the quantity starting at 140 billion Btu/d and increasing to 440 billion Btu/d. The LNG associated with 140 billion Btu/d of this gas supply, or approximately 850 000 tpy, will be owned and marketed by Cheniere and EOG will receive a price based on the Platts Japan Korea Marker (JKM) for this gas. The remaining 300 billion Btu/d will be sold by EOG to Cheniere at a price indexed to Henry Hub.

“We are pleased to partner with EOG, one of the largest independent natural gas producers in the United States, on our second Integrated Production Marketing (IPM) transaction which is expected to support Corpus Christi Stage III,” said Corey Grindal, Cheniere’s Senior Vice President, Gas Supply. “The IPM commercial structure leverages our world-scale infrastructure platform and capabilities in Corpus Christi, offering domestic natural gas producers efficient access to global LNG prices and long-term flow assurance, while providing Cheniere with reliable delivery of natural gas and commercial support for growth.”

“We look forward to working with Cheniere, the leading US LNG provider, to expand into international natural gas markets where global demand is expected to significantly increase for years to come,” said D. Lance Terveen, Senior Vice President, Marketing of EOG. “Adding gas sales agreements linked to LNG prices supports EOG’s portfolio approach to marketing our growing production of low-cost natural gas. These agreements further diversify our access to customers across multiple end markets in order to maximise our natural gas price realisations.”

A portion of the transaction is subject to certain conditions precedent, including a positive final investment decision on Cheniere’s Corpus Christi Stage III project. The Corpus Christi Stage III project is being developed to include up to seven midscale liquefaction trains with a total expected aggregate nominal production capacity of approximately 9.5 million tpy. The Corpus Christi Stage III project received a positive Environmental Assessment from the Federal Energy Regulatory Commission in March 2019 and is anticipated to receive all remaining regulatory approvals by the end of 2019.

Read the article online at: https://www.hydrocarbonengineering.com/tanks-terminals/17092019/cheniere-and-eog-resources-sign-long-term-gas-supply-agreements/

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