Cheniere Energy said on Thursday that two of its subsidiaries, Sabine Pass Liquefaction and Corpus Christi Liquefaction, have each entered into long term liquefied natural gas sale and purchase agreements with QatarEnergy, for a combined 4 million tonnes per annum through 2054. QatarEnergy will buy 2 million tonnes a year from each project on a free on board basis, at a price indexed to the Henry Hub price plus a fixed fee.
Deliveries will begin in the early 2030s and continue through the end of 2054. One million tonnes a year of the Sabine Pass agreement is subject to a positive final investment decision on the first phase of the Sabine Pass expansion project, which Cheniere is developing through Cheniere Energy Partners, with a first phase built around Train 7 and an expected capacity of more than 6 million tonnes a year.
Bloomberg reported that this is Qatar’s first such US offtake deal, and that it comes while Qatar’s own production has been reduced by the Iran war. Qatar’s Ras Laffan facility was damaged during the war, QatarEnergy has reduced flows sharply, and shipping traffic through the Strait of Hormuz remains disrupted, so the company is seeking supply for customers whose shipments have been disrupted.
Cheniere chief executive Jack Fusco said the agreements are a major long term commercial commitment and that the company looks forward to supplying QatarEnergy from both Sabine Pass and Corpus Christi into the second half of this century. Cheniere describes itself as the leading producer and exporter of LNG in the United States, with about 56 million tonnes a year of liquefaction capacity in operation on the Gulf Coast and about 5 million tonnes a year under construction.