Chesapeake Energy Corp. continues to move closer to getting premium international pricing for its Haynesville Shale gas.
Oklahoma City-based Chesapeake entered into a long-term LNG supply heads of agreement (HOA) with global commodities trader Vitol Inc., the company announced alongside third-quarter earnings after markets closed on Oct. 31.
Under the agreement, Chesapeake will supply up to 1 million tonnes per annum of LNG to Vitol for a period of 15 years. Purchase prices will be indexed to the international Japan Korea Marker (JKM).
“We are pleased to expand our relationship with Vitol to deliver independently certified reliable, affordable, lower carbon energy to global markets in need,” said Chesapeake President and CEO Nick Dell'Osso in a press release. “Today's announcement marks another important step on our path to 'Be LNG Ready,' and is further recognition of the premium rock, returns and runway of our advantaged portfolio and the strength of our financial position.”
Chesapeake and Vitol will jointly select “the most optimal liquefaction facility” in the U.S. to liquefy the gas produced by Chesapeake.
The HOA is targeted to begin in 2028.
“The global energy landscape has changed significantly in the last two years, which has highlighted the importance of U.S. natural gas production and liquefaction in satisfying the world's energy needs,” said Ben Marshall, head of Vitol Americas. “Global LNG demand is experiencing tremendous growth and Vitol continues to strengthen its position to safely and reliably deliver cost effective, flexible solutions to our customers around the world.”
Earlier this year, Chesapeake entered into a long-term LNG supply agreement with commodities trader Gunvor Singapore Pte Ltd. The agreement with Gunvor is slated to begin in 2027.
RELATED
Chesapeake LNG Deal Moves Its Haynesville Gas Closer to Global Price
Recommended Reading
Francine Closes, Restricts Oil Export Ports, Shuts in 42% of GoM Oil
2024-09-13 - In addition to hampering ports and refineries, an estimated 41.74% of Gulf of Mexico oil production, or 730,472 bbl/d, has been shut in.
Analyst: US NGL Market Tightens Links to Crude, NatGas Production
2024-09-02 - A boost in propane and ethane development is tied to the opening of the Matterhorn Pipeline in the Permian, evidence of the increasingly closer link between different sectors of the energy industry.
EPA Gives OK to Texas GulfLink Deepwater Port
2024-11-04 - Sentinel Midstream’s Texas GulfLink project is one of several proposals for an offshore oil terminal in the Gulf.
Lower Prices Spell Lower Oil Growth from Permian, US Shale: EIA
2024-10-09 - The U.S. Energy Information Administration reduced its forecasts for WTI oil prices and Lower 48 oil production growth in its latest Short-Term Energy Outlook report.
Oil Prices Rise as OPEC+ Considers Delaying December Output Increase
2024-10-30 - Oil prices rose more than 2% on Oct. 30 after Reuters reported that OPEC+ could delay a planned oil production increase in December by a month or more because of concern over soft oil demand and rising supply.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.