Cheniere Energy, Inc. (“Cheniere”) (LNG) announced that its subsidiary, Cheniere Corpus Christi Liquefaction Stage III, LLC (“CCL Stage III”), has amended the long-term Integrated Production Marketing (“IPM”) gas supply agreement signed in 2019 with EOG Resources, Inc. (“EOG”) (EOG), extending the term and tripling the volume of LNG associated with the natural gas supply under this long-term IPM transaction.
Under the amended IPM transaction, EOG has agreed to sell 420,000 MMBtu of natural gas per day to CCL Stage III for a period of 15 years, with one third of the supply targeted to commence upon the completion of each of Trains 1, 4 and 5 of the Corpus Christi Stage III project. The LNG associated with this gas supply, or approximately 2.55 million tonnes per annum (“mtpa”), will be owned and marketed by Cheniere, and EOG will receive a price based on the Platts Japan Korea Marker (“JKM”) for this gas.
In addition, the previously executed gas supply agreement, under which EOG will sell 300,000 MMBtu per day to CCL Stage III at a price indexed to Henry Hub, has been extended to 15 years. As a result, EOG will supply a total of 720,000 MMBtu of natural gas per day to CCL Stage III under the amended agreements for a 15-year period expected to commence upon start-up of the Corpus Christi Stage III project.
EOG will continue to sell 140,000 MMBtu of natural gas per day to Corpus Christi Liquefaction, LLC, which commenced in 2020, until the commencement of the amended long-term agreements. The LNG associated with this gas supply, or approximately 0.85 mtpa, is owned and marketed by Cheniere, and EOG receives a price based on JKM for this gas.
“We are pleased to build upon the mutually beneficial long-term agreements we signed in 2019 with EOG, one of the largest independent natural gas producers in the United States. The extension and increase of our original IPM transaction further leverages our infrastructure platform, capabilities, and operations in Corpus Christi,” said Jack Fusco, Cheniere’s President and Chief Executive Officer. “This transaction is expected to provide the remaining commercial support needed to move forward with Corpus Christi Stage III, and we are focused on completing the outstanding steps required in order to reach FID this year.”
The CCL Stage III project is being developed to include seven midscale liquefaction trains with a total expected nominal production capacity of over 10 mtpa.
