Cheniere signs long-term gas supply agreement with Apache

Cheniere Energy, Inc. has announced that its subsidiary, Cheniere Corpus Christi Liquefaction Stage III, LLC, has entered into a long-term gas supply agreement (GSA) with Apache Corp. Under the GSA, Apache has agreed to sell 140 billion btu/d of natural gas to Corpus Christi Stage III for a term of approximately 15 years. The LNG associated with this gas supply, approximately 850 000 tpy, will be marketed by Cheniere. Apache will receive an LNG price, net of a fixed liquefaction fee and certain costs incurred by Cheniere, for the natural gas delivered to Corpus Christi Stage III under this agreement. The LNG price is based on international LNG indices.

“This first-of-its-kind long-term agreement with Apache represents a commercial evolution in the U.S. LNG industry, as it will ensure the continued reliable delivery of natural gas to Cheniere from one of the premier producers in the Permian Basin, while enabling Apache to access global LNG pricing and receive flow assurance for its gas,” said Jack Fusco, Cheniere’s President and CEO. “This commercial agreement, which is expected to support the Corpus Christi Stage III project, reinforces Cheniere’s track record of creating innovative, collaborative solutions to meet customers’ needs and support Cheniere’s growth.”

“Apache’s agreement with Cheniere is part of the company’s long-term strategy to leverage the scale of our assets in the Permian Basin and diversify our customer base and cost structure by accessing new markets for natural gas produced at Alpine High. We are pleased to partner with Cheniere in this innovative marketing agreement,” said John J. Christmann IV, Apache’s President and CEO.

The Corpus Christi Stage III project is being developed to include up to seven midscale liquefaction trains with a total expected nominal production capacity of approximately 9.5 million tpy. Corpus Christi Stage III received a positive Environmental Assessment from the Federal Energy Regulatory Commission in March 2019 and is expected to receive all remaining necessary regulatory approvals for the project by the end of 2019.