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According to a statement by Diversified, the company will provide about 40 Bcf of natural gas under a fixed pricing construct indexed to Gulf Coast pricing for a period of three years.
The supplies will begin in November 2024.
Diversified did not reveal the name of the Gulf Coast LNG facility.
The company said this “significant contract collaboration encompasses the commitment to ensure energy security for global trading partners who are facing supply disruptions, geopolitical tensions, rising regional demands, and changing consumption patterns.”
Additionally, the company has been able to strategically take advantage of the recent strength of the natural gas price curve to add to its multiple-year hedge portfolio in 2025 through 2027, with an average NYMEX hedge price of about $3.45 per MMBtu.
Diversified will provide additional disclosures and an updated hedging schedule with its Q3 trading statement.
“This supply agreement to a Gulf Coast LNG export facility is a great example of the market’s recognition of Diversified’s reliable natural gas production and operational efficiency while providing another lever for the company to enhance margins and deliver consistent cash flows,” CEO Rusty Hutson, Jr. said
“The agreement not only reflects the critical need and strong global demand for natural gas but also the importance natural gas plays in powering global economies for decades to come,” he said.
According to Diversified’s latest corporate presentation posted on its website, its portfolio consists primarily of natural gas production from mature assets within Appalachia (55 percent of production) and the Central Region (45 percent of production).
Diversified’s asset portfolio has grown to include about 17,700 miles (28,425 km) of gathering and transportation lines and associated compression stations.
The presentation shows that Diversified expects LNG exports will potentially represent 20-25 percent of current US natural gas production by 2026.
The projects include Cheniere’s Sabine Pass and Corpus Christi terminals, the Freeport LNG terminal, the Golden Pass LNG terminal, Sempra’s Cameron LNG terminal, and Venture Global’s Calcasieu Pass and Plaquemines LNG terminals.