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Cheniere Energy Inc., via its subsidiary Cheniere Marketing LLC, and Equinor signed a long-term sales and purchase agreement (SPA) that will see the Norwegian oil giant commence to receive LNG imports in less than four years.
Under the agreement, Equinor will acquire 1.75 million tons per annum (mtpa) of LNG on a free-on-board basis. The deal is for approximately 15 years, and volumes are slated to commence sailing in the second half of 2026 with full volumes expected in the second half of 2027, Cheniere announced June 9 in a press release.
Approximately 50% of the volume, or 0.9 mtpa, is conditional on Cheniere taking a final investment decision (FID) to expand liquefaction capacity at the Corpus Christi LNG Terminal beyond the seven-train Corpus Christi Stage III Project.
“The SPA also reflects the urgency in demand for investment in additional LNG capacity, not only for the Corpus Christi Stage III Project, which is nearing FID, but also for capacity beyond the project’s initial seven trains,” Cheniere’s president and CEO Jack Fusco said in the release.
The Corpus Christi project is being developed to include up to seven midscale liquefaction trains with a total nominal capacity that is expected to exceed 10 mtpa. Cheniere is expected to announce a final investment decision regarding the project in the summer of 2022. Operations could start in late 2025, Cheniere revealed in a corporation presentation in May 2022.
Global demand growth by 2040 is expected to drive the need to drastically boost LNG supply above and beyond capacity currently operational and under construction, Cheniere added.
“Rising capacity and utilization are projected to take U.S. exports of LNG up from 11.6 Bcf/d in April 2022 to 13.4 Bcf/d by December 2022 and then hold near those levels until new capacity comes online in 2024,” the Federal Reserve Bank of Dallas announced June 3 in its monthly Energy Indicators report. “Pipeline capacity to Mexico is also projected to rise, increasing total U.S. pipeline exports from 7.7 Bcf/d to 9.2 Bcf/d.”
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