Cheniere Energy has taken a final investment decision (FID) on its 10+ million tonnes per annum (mtpa) of LNG Corpus Christi Stage 3 Liquefaction Project (CCL Stage 3) and has issued full notice to proceed to Bechtel Energy to continue construction, which began earlier this year under limited notice to proceed. Early this month, a Cheniere subsidiary closed on an amended $4 billion term loan as well as a $1.5 billion upsized working capital facility. Borrowings under the term loan will be used to fund half of the expected cost to bring CCL Stage 3 on-line. The remaining costs are expected to be funded from Cheniere.
“Reaching FID on CCL Stage 3 represents an important milestone for Cheniere as we move forward on this significant growth project, which will strengthen our market-leading LNG infrastructure platform, provide much-needed volumes to the global LNG market by the end of 2025, and create long-term value for our stakeholders,” said Jack Fusco, Cheniere president and chief executive. “CCL Stage 3 is supported by a truly global portfolio of long-term customers and reflects the call for investment in natural gas infrastructure around the world to support environmental priorities and long-term energy security.”
In a separate deal, Cheniere entered into long-term LNG sale and purchase agreements with supermajor Chevron. At plateau, Chevron will purchase a combined 2 mtpa of LNG from Cheniere subsidiaries, subject to certain conditions.
Under the first agreement, Chevron has agreed to purchase approximately 1 mtpa of LNG from Sabine Pass LNG on a free-on-board (FOB) basis. Deliveries under the agreement will begin in 2026, reach the full 1 mtpa in 2027 and continue until mid-2042. Under the second agreement, Chevron has agreed to purchase approximately 1 mtpa of LNG from Cheniere Marketing on an FOB basis with deliveries beginning in 2027 and continuing for approximately 15 years.
The Cheniere Marketing agreement is subject to Cheniere making a positive FID to construct additional liquefaction capacity at the Corpus Christi LNG Terminal beyond the seven-train CCS Stage 3 project. The purchase price for LNG under the agreements is indexed to the Henry Hub price, plus a fixed liquefaction fee.
Additionally, Cheniere’s Sabine Pass LNG and Chevron have agreed to terms for the early termination of their LNG terminal use agreement in return for a lump sum payment to be made by Chevron this year. Termination of the terminal use agreement is subject to the consent of certain lenders to Cheniere Energy Partners, expected during the third quarter of 2022.
“Our strategy is to deliver lower carbon energy to a growing world," said Colin Parfitt, Chevron's vice president for midstream. “Our agreements with Cheniere allow us to harness growing US natural gas production and Gulf Coast LNG export capacity to help meet long-term demand for affordable, reliable, and ever cleaner energy.”
