Cheniere will deliver half of the LNG volume under the SPA, starting from 2027, with remaining half to be delivered, subject to positive Final Investment Decision (FID) on the Sabine Pass Liquefaction (SPL) Expansion Project
Arctic Voyager leaving Hammerfest LNG. (Credit: Rino Engdal/Equinor)
Norwegian petroleum refining company Equinor has signed a long-term sale and purchase agreement (SPA) to procure liquefied natural gas (LNG) from US-based natural gas company Cheniere Energy.
Under the terms of the SPA, Equinor will purchase around 1.75 million tonnes per annum (mtpa) of LNG from Cheniere Marketing, a subsidiary of Cheniere Energy, for around 15 years.
Cheniere Marketing will deliver half of the LNG volume under the SPA, starting from 2027.
The remaining half is delivered, subject to a positive Final Investment Decision (FID) on the first train of the Sabine Pass Liquefaction (SPL) Expansion Project.
Cheniere president and chief executive officer Jack Fusco said: “We are pleased to expand our relationship with Equinor, one of Europe’s leading energy companies, building upon the SPA we executed last year.
“This SPA underscores Cheniere’s and Equinor’s shared vision of an energy future built upon reliable, flexible, and cleaner energy solutions.
“This SPA is expected to provide further commercial support to the SPL Expansion Project, which we continue to rigorously develop in order to meet the world’s growing demand for secure, long-term energy supplies and the economic and environmental benefits of Cheniere’s LNG.”
The SPL Expansion Project will include up to three natural gas liquefaction trains and is expected to have a total production capacity of around 20mtpa of LNG.
Last month, Cheniere Energy subsidiaries entered the pre-filing review process with the Federal Energy Regulatory Commission (FERC), with respect to the SPL Expansion Project.
Equinor said that the SPA with Cheniere brings the total contracted volumes with Cheniere to around 3.5mtpa, doubling its LNG export out of Cheniere’s terminals on the US Gulf coast.
Equinor gas and power senior vice president Helge Haugane said: “Europe will need natural gas to ensure flexible energy on demand to support the build-out of more intermittent renewables and LNG will play an important role.
“In other markets, for example in Asia, demand for LNG is expected to grow as a solution to energy security as well as lower emissions.
“Equinor has an ambition to strengthen its role as a leading supplier of natural gas and with our supply agreements with Cheniere we are expanding our global position.”