Chesapeake, Delfin, and Guvnor Enter Long-Term LNG Offtake Agreement

Sales price will be linked to the Japan Korea Marker for a 20-year period.

Delfin's deepwater FLNG port plans include a mix of existing and newbuild assets in the US Gulf of Mexico.
Source: Delfin

Chesapeake Energy together with certain of its subsidiaries entered into an LNG export deal with Delfin LNG and Gunvor Group that includes executed sales and purchase agreements (SPA) for long-term liquefaction offtake.

Under the SPA, Chesapeake will purchase approximately 0.5 mtpa of LNG from Delfin at a Henry Hub price and contract targeted start date in 2028, then deliver to Gunvor on a free-on-board (FOB) basis with the sales price linked to the Japan Korea Marker for a period of 20 years. These volumes will represent 0.5 mtpa of the previously announced up to 2 mtpa heads of agreement with Gunvor.

“Today's announcement cements an important step on our path to 'Be LNG Ready' and is further recognition of the depth of our portfolio and strength of our financial position,” said Nick Dell'Osso, Chesapeake president and CEO. “We are pleased to formalize our agreement which provides diversification and access to global LNG pricing while enabling the delivery of affordable, reliable, lower-carbon energy to markets in need.”

Last November, Delfin Midstream and Gunvor Group entered long-term LNG SPA with Delfin LNG whereby Delfin LNG would supply between 0.5 to 1.0 mtpa to Gunvor on a FOB basis at the Delfin Deepwater Port, located 40 nautical miles off the coast of Louisiana for a minimum duration of 15 years.

Regarding the Chesapeake agreement, Kalpesh Patel, member of the executive committee of Gunvor, said, “This deal represents an important step in finalizing the 0.5 mtpa out of our total of 2.0 mtpa arrangement with Chesapeake, while expanding our existing cooperation with Delfin. We continue to provide reliable and competitive logistics services to our partners by utilizing our fleet consisting of vessels procured via term charters and equity ownership. Gunvor looks forward to establishing additional agreements with the companies in the near future.”

The Delfin LNG Deepwater Port project is designed to support four floating LNG (FLNG) vessels with a combined export capacity of up to 13.3 mtpa. The company continues to secure commercial agreements for LNG sales and liquefaction services and is in the final phase towards final investment decision on its first three FLNG vessels.