Loading of the first commissioning cargo at the Sabine Pass LNG Terminal in February 2016. File photo: Cheniere Energy
Norwegian energy giant Equinor is doubling the volume of liquified natural gas that it exports out of Cheniere’s Sabine Pass LNG terminal on the U.S. Gulf coast.
The two companies on Wednesday announced a new 15-year sale and purchase (SPA) agreement of around 1.75 million tonnes of LNG per year, with half of the volume starting from 2027. This agreement brings the total volumes that Equinor has contracted with Cheniere up to around 3.5 million tonnes per year.
Equinor anticipates significant growth in the LNG market, with US LNG playing a role in providing energy security and enabling a transition to cleaner energy. Equinor aims to increase its role as a supplier of natural gas in global markets while maintaining its position as Europe’s major supplier.
“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,” said Helge Haugane, Equinor’s senior vice president for Gas & Power. “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.”
Under the SPA, Equinor has agreed to purchase approximately 1.75 million tonnes per annum of LNG from Cheniere Marketing on a free-on-board basis for a term of approximately 15 years starting in 2027, with deliveries expected to reach the full 1.75 mtpa towards the end of the decade.
Cheniere said the SPA provides additional commercial support for a Final Investment Decision on its Sabine Pass Liquefaction Expansion Project, which will include up to three natural gas liquefaction trains with an expected total production capacity of approximately 20 mtpa of LNG
“This SPA underscores Cheniere’s and Equinor’s shared vision of an energy future built upon reliable, flexible, and cleaner energy solutions,” said Jack Fusco, Cheniere’s President and Chief Executive Officer. “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.”
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