Equinor Signs Long-Term LNG Deal With Cheniere Energy
The deal is expected to support the liquefied natural gas exporter’s Sabine Pass liquefaction expansion project.
US liquefied natural gas (LNG) exporter Cheniere Energy and Norway’s Equinor announced a new sale and purchase agreement (SPA), under which Equinor will buy 1.75 mtpa of LNG from Cheniere Marketing on a free-on-board basis for a purchase price indexed to the Henry Hub price, plus a fixed liquefaction fee.
Half of the LNG volume will begin delivery in 2027, with the delivery of the second half subject to the favorable final investment decision of the Sabine Pass Liquefaction Expansion Project.
The term of the SPA is 15 years from delivery of the total 1.75 mtpa of LNG volumes, according to Cheniere.
“We are pleased to expand our relationship with Equinor, one of Europe’s leading energy companies, building upon the SPA we executed last year,” said Jack Fusco, Cheniere’s president and chief executive.
“This SPA underscores Cheniere’s and Equinor’s shared vision of an energy future built upon reliable, flexible, and cleaner energy solutions," he said. "This SPA is expected to provide further commercial support to the SPL Expansion Project, which we continue to rigorously develop to meet the world’s growing demand for secure, long-term energy supplies and the economic and environmental benefits of Cheniere’s LNG.”
This is the second long-term LNG deal the Oslo-based energy company entered with Cheniere this month.
The two companies announced on 9 June a 15-year SPA for 1.75 mtpa of LNG. The deliveries will start in the second half of 2026 and reach a full 1.75 mtpa in the second half of 2027, according to Equinor. About half of the volume, 0.9 mtpa, 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, according to Equinor.
“I am very pleased that we have entered into another long-term agreement with Cheniere. Europe will need natural gas to ensure flexible energy on demand to support the build-out of more intermittent renewables. LNG will play an important role,” said Helge Haugane, Equinor’s senior vice president for gas and power.
“In other markets, for example in Asia, demand for LNG is expected to grow as a solution to energy security and lower emissions. Equinor has the ambition to strengthen its role as a leading natural gas supplier, and with our supply agreements with Cheniere, we are expanding our global position," Haugane said.
The Sabine Pass LNG terminal, located in Cameron Parish, Louisiana, first came online in 2016. The facility consists of six liquefaction trains with a total LNG production capacity of about 30 mtpa. The terminal also has operational regasification facilities that include five LNG storage tanks, vaporizers, and three marine berths.
The Sabine Pass liquefaction expansion project includes up to three natural gas liquefaction trains with an expected total LNG production capacity of approximately 20 mtpa. In February 2023, Cheniere initiated a prefiling review process with the Federal Energy Regulatory Commission (FERC) under the National Environmental Policy Act.
The company is targeting project construction to begin in the fourth quarter of 2025, with a complete project in-service date expected for the second half of 2032, according to its filing documentation with FERC.