U.S. LNG exporter Cheniere Energy has extended the long-term gas supply agreement signed in 2019 with EOG Resources, tripling the volume of LNG associated with the natural gas supply.
This transaction is to complete the commercialization of Cheniere’s Corpus Christi Stage III project.
The parties signed the first deal back in 2019 as an integrated production marketing (IPM) gas supply agreement.
Under the amended IPM transaction, EOG agreed to sell 420,000 MMBtu of natural gas per day to CCL Stage III. This is for a period of 15 years.
Furthermore, one-third of the supply is to start upon the completion of each of Trains 1, 4 and 5 of the Corpus Christi Stage III. The LNG associated with this gas supply, or approximately 2.55 million tonnes per annum (mtpa), will be owned and marketed by Cheniere. EOG will receive a price based on the Platts Japan Korea Marker (JKM) for this gas.
In addition, the previous agreement, under which EOG will sell 300,000 MMBtu per day to CCL Stage III at a price indexed to Henry Hub, has been extended to 15 years.
As a result, EOG will supply a total of 720,000 MMBtu of natural gas per day to CCL Stage III under the amended agreements for a 15-year period to start upon start-up of the Corpus Christi Stage III.
EOG will continue to sell 140,000 MMBtu of natural gas per day to Corpus Christi, which commenced in 2020, until the commencement of the amended long-term agreements. The LNG associated with this gas supply, or approximately 0.85 mtpa, is owned and marketed by Cheniere. EOG receives a price based on JKM for this gas.
“The extension and increase of our original IPM transaction further leverages our infrastructure platform, capabilities, and operations in Corpus Christi,” said Jack Fusco, Cheniere’s CEO. “This transaction is expected to provide the remaining commercial support needed to move forward with Corpus Christi Stage III, and we are focused on completing the outstanding steps required in order to reach FID this year.”
The CCL Stage III will include seven midscale liquefaction trains with a total expected nominal production capacity of over 10 mtpa.
Source: Offshore Energy