Two of Cheniere Energy Inc.'s subsidiaries, Sabine Pass Liquefaction LLC and Cheniere Marketing LLC, each entered into long-term sale and purchase agreements (SPA) with Chevron U.S.A. Inc., a company press release announced on June 22.
Per the SPAs, Chevron will purchase approximately 1 mtpa from each Cheniere subsidiary on a free-on-board basis. Under the agreement with Sabine Pass, deliveries will begin in 2026, reaching the full amount during 2027 and continuing through mid-2042. Per the agreement with Cheniere Marketing, deliveries will begin in 2027 and continue for approximately 15 years.
"These long-term SPAs underscore the growing demand for reliable, cleaner burning LNG supply beyond 2040 and further support investment in additional LNG capacity beyond our Corpus Christi Stage III Project," Cheniere executive vice president and COO Anatol Feygin commented. "We look forward to leveraging our market-leading LNG platform to explore opportunities to collaborate with Chevron on lower-carbon initiatives in the future."
The SPA with Cheniere Marketing is subject to Cheniere making a positive final investment decision to construct additional liquefaction capacity at the Corpus Christi LNG Terminal beyond the seven-train Corpus Christi Stage III Project.
Additionally, Chevron agreed for the early termination of Sabine Pass LNG's LNG terminal use agreement in return for a lump sum payment to be made during calendar year 2022. Termination of the agreement is subject to the consent of certain lenders to Cheniere Energy Partners LP, which should occur during third quarter 2022. Sabine Pass LNG is another subsidiary of Cheniere Energy, founded in 2008.
"Our agreements with Cheniere allow us to harness growing U.S. natural gas production and Gulf Coast LNG export capacity to help meet long-term demand for affordable, reliable, and ever cleaner energy,” Chevron vice president of midstream Colin Parfitt added, stating that the company's agreements align with its goal to deliver lower carbon energy globally.
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