Cheniere Energy has entered into a 15-year gas supply agreement with Apache Corporation for delivery of approximately 140,000 MMBtu per day of natural gas to the Corpus Christi LNG Stage 3 development in Texas.
The LNG associated with this gas supply, approximately 0.85 million tonnes per annum (mtpa), will be marketed by Cheniere, Cheniere said in a statement.
Apache will receive an LNG price, net of a fixed liquefaction fee and certain costs incurred by Cheniere, for the natural gas delivered to Corpus Christi Stage III under this agreement. The LNG price is based on international LNG indices, the statement reads.
The Corpus Christi Stage III project is being developed to include up to seven midscale liquefaction trains with a total expected nominal production capacity of approximately 9.5 mtpa.
The project has already received a positive environmental assessment from the Federal Energy Regulatory Commission (FERC) in March 2019 and is expected to receive all remaining necessary regulatory approvals for the project by the end of 2019.
“This first-of-its-kind long-term agreement with Apache represents a commercial evolution in the U.S. LNG industry, as it will ensure the continued reliable delivery of natural gas to Cheniere from one of the premier producers in the Permian Basin, while enabling Apache to access global LNG pricing and receive flow assurance for its gas,” said Jack Fusco, Cheniere’s president and CEO.
“Apache’s agreement with Cheniere is part of the company’s long-term strategy to leverage the scale of our assets in the Permian Basin and diversify our customer base and cost structure by accessing new markets for natural gas produced at Alpine High,” said John Christmann IV, Apache’s CEO and president.