Cheniere Energy strengthens its global LNG market position with strategic agreements, including a long-term deal with Galp Trading and key expansion projects
Cheniere Energy, a leading producer and exporter of liquefied natural gas (LNG) in the United States, continues to strengthen its position in the global LNG market through strategic agreements and expansion projects
In a notable move, Cheniere Marketing, a subsidiary of Cheniere Energy, has announced a long-term LNG sale and purchase agreement (SPA) with Galp Trading, a subsidiary of Galp Energia of Portugal. Under the terms of the agreement, Galp will purchase approximately 0.5M tonnes per annum (mta) of LNG for 20 years. The purchase price is indexed to the Henry Hub price, with a fixed liquefaction fee.
Deliveries are set to commence in the early 2030s, contingent on a positive final investment decision (FID) for the second train of the Sabine Pass Liquefaction Expansion Project (SPL Expansion Project).
Cheniere president and chief executive Jack Fusco expressed his enthusiasm, stating, “We are pleased to enter into this long-term agreement with Galp, a leader across Iberia’s energy sector, which reinforces the critical role US natural gas is expected to play in Europe’s energy mix into the second half of this century.”
The Galp agreement is one of several recent strategic agreements secured by Cheniere.
In November 2023, Cheniere’s Sabine Pass Liquefaction Stage V entered into an integrated production marketing agreement with ARC Resources US Corp, a subsidiary of ARC Resources Ltd.
This agreement involves the purchase of 140,000 MMBtu per day of natural gas at a price based on the Dutch Title Transfer Facility, minus a fixed regasification fee, fixed LNG shipping costs and a fixed liquefaction fee. The 15-year term will commence with the commercial operations of the first train of the SPL Expansion Project, subject to a positive FID by Cheniere Energy Partners (CQP).
Cheniere Marketing also entered into long-term SPAs with Foran Energy Group, BASF, ENN LNG (Singapore), Equinor and Korea Southern Power. These agreements cover an estimated 106M tonnes of LNG, with deliveries expected between 2026 and 2050. Approximately 65M tonnes are contingent on a positive FID for the first or second trains of the SPL Expansion Project.
These SPAs also permit Cheniere Marketing to assign or novate the agreements to certain affiliates, enhancing the flexibility and reach of these contracts.
Cheniere’s expansion projects and regulatory filings further underline its strategic growth. In May 2023, certain subsidiaries of CQP began the prefiling review process with the Federal Energy Regulatory Commission under the National Environmental Policy Act for the SPL Expansion Project.
Earlier, in April 2023, a subsidiary of Cheniere executed a contract with Bechtel to provide front-end engineering and design work for the project. The SPL Expansion Project aims to add up to approximately 20 mta of LNG capacity, including debottlenecking opportunities.
Additionally, Cheniere is progressing with the Corpus Christi Liquefaction Midscale Trains 8 & 9 Project and in July 2023, the Department of Energy authorised Cheniere to export LNG to Free Trade Agreement countries.