Cheniere Signs 22-Year LNG Supply Deal With Petrobras

Cheniere Energy has signed a 22-year agreement to supply Brazil’s Petrobras with U.S. liquefied natural gas, adding another long-term customer as the company looks to support further expansion of its Gulf Coast export business.

Under the sale and purchase agreement, Petrobras will purchase approximately 800,000 tonnes of LNG per year from Cheniere Marketing on a free-on-board basis.

Cheniere did not disclose when deliveries will begin or the pricing formula for the contract.

The free-on-board structure generally leaves the buyer responsible for arranging ocean transportation after the LNG is loaded, giving Petrobras flexibility over where it sends the cargoes.

“We are pleased to enter into this multi-decade agreement with Petrobras, one of the largest energy companies in the world,” said Jack Fusco, Cheniere’s chairman, president and CEO.

Fusco said the agreement provides additional commercial support and fixed-fee cash flow visibility as Cheniere considers further brownfield liquefaction growth.

“We look forward to providing our secure and reliable LNG to Petrobras into the second half of this century under this new long-term agreement,” he said.

The deal comes as Cheniere continues to expand one of the world’s largest LNG export platforms.

The Houston-based company operates the Sabine Pass LNG terminal in Louisiana and Corpus Christi LNG facility in Texas, with approximately 56 million tonnes per annum of combined production capacity. Cheniere says another roughly 5 mtpa of capacity is under construction, including estimated debottlenecking opportunities.

The Petrobras agreement follows the recent completion of Cheniere’s major Stage 3 expansion at Corpus Christi.

As gCaptain reported in August, Cheniere reached substantial completion of the seventh and final Stage 3 liquefaction train on August 28, increasing its overall LNG production capacity by more than 20%.

The company also marked its 5,000th LNG cargo the following day when the LNG carrier Yari departed Sabine Pass bound for Asia. Cheniere reached the milestone just over a decade after shipping its first LNG cargo from Sabine Pass in 2016.

Cheniere has said it is continuing to pursue additional liquefaction expansion opportunities at its Gulf Coast facilities. The Petrobras contract adds another long-duration commitment as the company weighs that next phase of growth.

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