Houston-based LNG player Cheniere Energy has signed a long-term liquefied natural gas supply deal with its compatriot oil and gas exploration and production company EOG Resources.
Under the agreements signed through two of Cheniere’s units, EOG agreed to sell natural gas to Cheniere over a period of approximately 15 years beginning in early 2020, with the quantity starting at 140,000 mmbtu per day and increasing to 440,000 mmbtu per day.
The 140,000 mmbtu per day of LNG 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 300,000 mmbtu per day will be sold by EOG to Cheniere at a price indexed to Henry Hub.
Corey Grindal, Cheniere’s SVP for gas supply, said: “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.”
D. Lance Terveen, EOG’s SVP of marketing, added: “We look forward to working with Cheniere, the leading U.S. LNG provider, to expand into international natural gas markets where global demand is expected to significantly increase for years to come. These agreements further diversify our access to customers across multiple end markets to maximize our natural gas price realizations.”
It is worth noting that a portion of the transaction is subject to certain conditions, 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 mtpa.
The project received a positive environmental assessment from the FERC in March 2019 and is anticipated to receive all remaining regulatory approvals by the end of 2019.