Delfin Midstream, the developer of a floating LNG export project in the Gulf of Mexico, has entered into a deal with US oil and gas producer Devon Energy for long-term liquefaction capacity and a pre-financial investment decision strategic investment.
The heads of agreement provides the framework for finalizing a definitive long-term tolling agreement representing 1 mtpa of liquefaction capacity in Delfin’s first floating LNG vessel, with the ability to add an additional 1 mtpa in Delfin’s first or a future FLNG, according to a joint statement.
In addition to providing Devon up to 2 mtpa of total liquefaction capacity on a long-term basis, the HOA also provides opportunity for additional future equity investments in Delfin by Devon, the statement said.
Dudley Poston, Delfin CEO welcomed this agreement with Devon, “representing a truly strategic partnership between a US producer and a liquefaction provider.”
“Our decision to invest in Delfin was the result of a thorough process intended to create additional pricing diversification for our natural gas portfolio and deliver a sustainable and capital efficient return for our shareholders,” Rick Muncrief, Devon’s President and CEO said.
Delfin is also conducting “numerous advanced discussions” for additional binding SPAs, HOAs and tolling agreements similar to those previously announced, the statement said.
As a modular project requiring only 2 to 2.5 mtpa of long-term contracts to begin construction, and with all necessary permits in hand, Delfin “is on schedule to make FID on its first floating LNG vessel by the end of this year,” it said.