EQT Corp. has entered into a heads of agreement (HOA) for liquefaction services from Commonwealth LNG's facility in Cameron, Louisiana. The deal is for 1 million tonnes per annum (mtpa) of LNG under a 15-year tolling agreement.

“Our tolling capacity gives us the flexibility to sell our gas directly to end users globally and we are currently pursuing long-term purchase agreements with prospective international buyers,” EQT President and CEO Toby Z. Rice said in a Sept.18 press release.

“This HOA with Commonwealth represents another step forward in EQT’s risk-adjusted LNG strategy, which seeks to diversify a portion of our production to international markets via arrangements that offer the best combination of upside exposure and downside risk mitigation,” Rice said.

Final terms remain subject to negotiation of a definitive agreement between the parties, according to EQT.

Commonwealth LNG looks to take a final investment decision for its six-train 9.3 mtpa project sometime in first-quarter 2024, it said in the release. And the first LNG cargo is expected in 2027.

In what is EQT’s second tolling HOA, the company's total future LNG liquefaction capacity of 270 MMcf/d, or 4% of its current production, Truist Securities said in a Sept. 18 research report.

“As EQT and the other gas exploration & production names have decoupled from the commodity for most of 2023 we believe announcements such as today's will have a more prominent impact on the stocks than conservative investors might imagine, as we expect many long-only funds are much more focused on the outer-year setup than near term pricing/cashflows and are more interested in the flexibility the tolling contracts afford EQT rather than the more structured nature of an index-linked sales agreement,” Truist said.