Cheniere and Chevron Sign Long-Term LNG Sale and Purchase Agreements
22 June 2022 - 10:00PM
Business Wire
Cheniere Energy, Inc. (“Cheniere” or the “Company”) (NYSE
American: LNG) announced today that two of its subsidiaries, Sabine
Pass Liquefaction, LLC (“SPL”) and Cheniere Marketing, LLC
(“Cheniere Marketing”), have each entered into long-term liquefied
natural gas (“LNG”) sale and purchase agreements (each, an “SPA”)
with Chevron U.S.A. Inc. (“Chevron”), a wholly-owned subsidiary of
Chevron Corporation (NYSE: CVX). At plateau, Chevron will purchase
a combined 2.0 million tonnes per annum (“mtpa”) of LNG from
Cheniere subsidiaries, subject to certain conditions described
below.
Under the first SPA, Chevron has agreed to purchase
approximately 1.0 mtpa of LNG from SPL on a free-on-board (“FOB”)
basis. Deliveries under the SPA will begin in 2026, reach the full
1.0 mtpa during 2027 and continue until mid-2042. Under the second
SPA, Chevron has agreed to purchase approximately 1.0 mtpa of LNG
from Cheniere Marketing on an FOB basis with deliveries beginning
in 2027 and continuing for approximately 15 years. The Cheniere
Marketing SPA is subject to Cheniere making a positive final
investment decision to construct additional liquefaction capacity
at the Corpus Christi LNG Terminal beyond the seven-train Corpus
Christi Stage III Project. The purchase price for LNG under the
SPAs is indexed to the Henry Hub price, plus a fixed liquefaction
fee.
Additionally, Cheniere’s subsidiary, Sabine Pass LNG, L.P.
(“SPLNG”), and Chevron have agreed to terms for the early
termination of their LNG Terminal Use Agreement (the “TUA”) in
return for a lump sum payment to be made by Chevron to SPLNG during
calendar year 2022. Termination of the TUA is subject to the
consent of certain lenders to Cheniere Energy Partners, L.P.,
expected during the third quarter of 2022.
“We are pleased to welcome Chevron, one of the world’s premier
integrated energy companies, as a valued long-term LNG offtaker,”
said Anatol Feygin, Cheniere’s Executive Vice President and Chief
Commercial Officer. “These long-term SPAs underscore the growing
demand for reliable, cleaner burning LNG supply beyond 2040 and
further support investment in additional LNG capacity beyond our
Corpus Christi Stage III Project. We look forward to leveraging our
market-leading LNG platform to explore opportunities to collaborate
with Chevron on lower-carbon initiatives in the future.”
"Our strategy is to deliver lower carbon energy to a growing
world," said Colin Parfitt, Chevron Vice President, Midstream. "Our
agreements with Cheniere allow us to harness growing U.S. natural
gas production and Gulf Coast LNG export capacity to help meet
long-term demand for affordable, reliable, and ever cleaner
energy.”
About Cheniere
Cheniere Energy, Inc. is the leading producer and exporter of
liquefied natural gas (LNG) in the United States, reliably
providing a clean, secure, and affordable solution to the growing
global need for natural gas. Cheniere is a full-service LNG
provider, with capabilities that include gas procurement and
transportation, liquefaction, vessel chartering, and LNG delivery.
Cheniere has one of the largest liquefaction platforms in the
world, consisting of the Sabine Pass and Corpus Christi
liquefaction facilities on the U.S. Gulf Coast, with total
production capacity of approximately 45 mtpa of LNG in operation
and an additional 10+ mtpa of expected production capacity under
construction. Cheniere is also pursuing liquefaction expansion
opportunities and other projects along the LNG value chain.
Cheniere is headquartered in Houston, Texas, and has additional
offices in London, Singapore, Beijing, Tokyo, and Washington,
D.C.
For additional information, please refer to the Cheniere website
at www.cheniere.com and Quarterly Report on Form 10-Q for the
quarter ended March 31, 2022, filed with the Securities and
Exchange Commission.
Forward-Looking Statements
This press release contains certain statements that may include
“forward-looking statements” within the meanings of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. All statements, other than statements of
historical or present facts or conditions, included herein are
“forward-looking statements.” Included among “forward-looking
statements” are, among other things, (i) statements regarding
Cheniere’s financial and operational guidance, business strategy,
plans and objectives, including the development, construction and
operation of liquefaction facilities, (ii) statements regarding
regulatory authorization and approval expectations, (iii)
statements expressing beliefs and expectations regarding the
development of Cheniere’s LNG terminal and pipeline businesses,
including liquefaction facilities, (iv) statements regarding the
business operations and prospects of third-parties, (v) statements
regarding potential financing arrangements, (vi) statements
regarding future discussions and entry into contracts, (vii)
statements relating to Cheniere’s capital deployment, including
intent, ability, extent, and timing of capital expenditures, debt
repayment, dividends, and share repurchases, and (viii) statements
regarding the COVID-19 pandemic and its impact on our business and
operating results. Although Cheniere believes that the expectations
reflected in these forward-looking statements are reasonable, they
do involve assumptions, risks and uncertainties, and these
expectations may prove to be incorrect. Cheniere’s actual results
could differ materially from those anticipated in these
forward-looking statements as a result of a variety of factors,
including those discussed in Cheniere’s periodic reports that are
filed with and available from the Securities and Exchange
Commission. You should not place undue reliance on these
forward-looking statements, which speak only as of the date of this
press release. Other than as required under the securities laws,
Cheniere does not assume a duty to update these forward-looking
statements.
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Cheniere Energy, Inc. Investors
Randy Bhatia, 713-375-5479 Frances Smith, 713-375-5753 Media Relations Eben Burnham-Snyder, 713-375-5764
Phil West, 713-375-5586
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