US LNG exporting giant Cheniere has signed a deal with Norway’s Equinor to supply the latter with liquefied natural gas for about 15 years.
Under the sales and purchase agreement, Cheniere Marketing will supply about 1.75 million tonnes per annum (mtpa) of LNG to Equinor on a free-on-board basis.
The deliveries under the SPA will start in the second half of 2026 and reach the full 1.75 mtpa in the second half of 2027, according to a Cheniere statement.
Half of the volume, or approximately 0.9 mtpa, is subject to Cheniere making a positive final investment decision (FID) to construct additional liquefaction capacity at the Corpus Christi LNG terminal beyond the seven-train Corpus Christi Stage III Project, it said.
Cheniere operates the giant Sabine Pass facility and the 15 mtpa three-train Corpus Christi plant which it plans to expand. It signed this year several deals for the Corpus Christi expansion project and said that it plans to take a final investment decision this year.
Under the expansion, Cheniere plans to add up to seven midscale trains, each with an expected liquefaction capacity of about 1.49 mtpa, with a total production capacity of more than 10 mtpa.
Cheniere recently won an extension from FERC to build the expansion project by June 30, 2027.
In addition, Cheniere awarded earlier this year a lump sum, turnkey, engineering, procurement and construction contract to compatriot Bechtel for the expansion.
Additional LNG capacity
“Equinor is one of Europe’s premier energy companies, and we are excited to form a long-term relationship with another strategic customer that shares our ambitions for a sustainable future,” Cheniere’s CEO Jack Fusco said in the statement.
He said this SPA, “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.”
This year, US export terminals shipped the majority of their volumes to Europe due to high prices and as European countries look to slash reliance on Russian gas.
Equinor recently also shipped the first cargo from its 4.3 mtpa Hammerfest LNG export plant in Norway since a fire that broke out at the facility in September 2020. This plant will also help cater to some of the European demand.
The Norwegian player said in a separate statement that this SPA would add new volumes to the company’s already “significant gas portfolio” of pipeline gas and LNG.
With global energy demand growing and increased focus on energy security, the LNG market is expected to grow “significantly”, according to Equinor.
US LNG can supply the European markets as well as cover demand in other markets, it said.
Helge Haugane, Equinor’s senior vice president gas and power, said in the statement the new LNG agreement, “is a major building block in Equinor’s ambition to further strengthen our global gas position by adding more LNG to the portfolio.”
“LNG will play a crucial role in providing energy security. By increasing our position in this segment, we will be even better positioned as a long-term reliable supplier of energy,” Haugane said.