Cheniere and EOG Increase Volume and Extend Term of Long-Term Integrated Production Marketing Transaction
Transaction Expected to Complete Commercialization of Corpus Christi Stage III Project
HOUSTON--(BUSINESS WIRE)-- Cheniere Energy, Inc. (“Cheniere” or the “Company”) (NYSE American: LNG) announced today 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”) (NYSE: 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.
Cheniere Energy, Inc. is the leading producer and exporter of liquefied natural gas (LNG) in the United States, reliably providing a clean, secure, and affordable solution to the growing global need for natural gas. Cheniere is a full-service LNG provider, with capabilities that include gas procurement and transportation, liquefaction, vessel chartering, and LNG delivery. Cheniere has one of the largest liquefaction platforms in the world, consisting of the Sabine Pass and Corpus Christi liquefaction facilities on the U.S. Gulf Coast, with total production capacity of approximately 45 million tonnes per annum of LNG in operation. Cheniere is also pursuing liquefaction expansion opportunities and other projects along the LNG value chain. Cheniere is headquartered in Houston, Texas, and has additional offices in London, Singapore, Beijing, Tokyo, and Washington, D.C.
For additional information, please refer to the Cheniere website at www.cheniere.com and Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission.
EOG Resources, Inc. (NYSE: EOG) is one of the largest crude oil and natural gas exploration and production companies in the United States with proved reserves in the United States and Trinidad. To learn more, visit www.eogresources.com.
This press release contains certain statements that may include “forward-looking statements” within the meanings of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical or present facts or conditions, included herein are “forward-looking statements.” Included among “forward-looking statements” are, among other things, (i) statements regarding Cheniere’s financial and operational guidance, business strategy, plans and objectives, including the development, construction and operation of liquefaction facilities, (ii) statements regarding regulatory authorization and approval expectations, (iii) statements expressing beliefs and expectations regarding the development of Cheniere’s LNG terminal and pipeline businesses, including liquefaction facilities, (iv) statements regarding the business operations and prospects of third parties, (v) statements regarding potential financing arrangements, (vi) statements regarding future discussions and entry into contracts, (vii) statements relating to Cheniere’s capital deployment, including intent, ability, extent, and timing of capital expenditures, debt repayment, dividends, and share repurchases, and (viii) statements regarding the COVID-19 pandemic and its impact on our business and operating results. Although Cheniere believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Cheniere’s actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in Cheniere’s periodic reports that are filed with and available from the Securities and Exchange Commission. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Other than as required under the securities laws, Cheniere does not assume a duty to update these forward-looking statements.
Cheniere Energy, Inc.
Randy Bhatia, 713-375-5479
Frances Smith, 713-375-5753
Eben Burnham-Snyder, 713-375-5764
Source: Cheniere Energy, Inc.
Released February 24, 2022