![Sales agreement](/sites/default/files/styles/hart_news_article_image_640/public/image/2023/10/shutterstock-1499196689.jpg?itok=gpGo4WnM)
The sales agreement is effective Jan. 1, 2024. (Source: Shutterstock)
Houston based independent oil and gas company Marathon Oil Corp. announced on Oct. 16 a five-year LNG sales agreement with Glencore Energy U.K. Ltd. effective Jan. 1, 2024.
The agreement includes a portion of Glencore’s equity natural gas from the Alba Field in Equatorial Guinea (E.G.)., Marathon said in an Oct. 16 press release. The pricing for the agreement is linked to the Dutch Title Transfer Facility (TTF) index allotting Marathon exposure to Europe’s LNG market. Marathon Oil holds a 64% working interest stake in the Alba Unit in the field, the company said.
Due to the expected arbitrage between LNG and methanol pricing, Marathon Oil announced it expects to optimize its E.G. integrated gas operations in 2024 by redirecting a portion of Alba Unit natural gas from the local methanol facility to the LNG facility, in which the company holds a 56% working interest.
“The timing of this new sales agreement, EG LNG's track record of reliable operations, and the plant's proximity to Europe resulted in tremendous demand and an extremely competitive process,” Lee Tillman, chairman, president and CEO at Marathon Oil, said in their release. “At recent forward curve pricing, we expect to realize an approximate year-on-year EBITDA increase of over $300 million next year across our E.G. integrated gas business, reflecting our differentiated and increasing exposure to the global LNG market.”
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