Delfin Midstream and Devon Energy enter into LNG export partnership

The HOA provides the framework for finalising a definitive long-term tolling agreement representing 1 million tpy of liquefaction capacity in Delfin’s first floating LNG (FLNG) vessel, with the ability to add an additional 1 million tpy in Delfin’s first or a future FLNG vessel. In addition to providing Devon up to 2 million tpy of total liquefaction capacity on a long-term basis, the HOA also provides opportunity for additional future equity investments in Delfin by Devon. Devon’s 2022 guidance will remain unchanged.

“We are delighted to execute this agreement with Devon, representing a truly strategic partnership between a US producer and a liquefaction provider,” said Dudley Poston, Delfin CEO. “We believe our unique liquefaction solution provides significant structural flexibility that allows producers to maximise the value of their natural gas, while providing a much-needed source of additional supply to the world LNG marketplace.”

“Our decision to invest in Delfin was the result of a thorough process intended to create additional pricing diversification for our natural gas portfolio and deliver a sustainable and capital efficient return for our shareholders,” said Rick Muncrief, Devon’s President and CEO. “Devon has a strong track record of finding best-in-class midstream and downstream solutions for our production, and we are excited to partner with Delfin to meet the need for safe, clean, and reliable energy.”

Following its recent announcement of a binding sales and purchase agreement (SPA) with Vitol and a HOA with Centrica, this announcement represents Delfin’s third major agreement in the past two months. Delfin is also in numerous advanced discussions on additional binding SPAs, HOAs, and tolling agreements similar to those previously announced.

As a modular project requiring only 2 to 2.5 million tpy of long-term contracts to begin construction, and with all necessary permits in hand, Delfin is on schedule to make FID on its first FLNG vessel by the end of this year.

Latham & Watkins LLP is serving as legal advisor to Delfin. Kirkland & Ellis LLP is serving as legal advisor to Devon.

Read the article online at: https://www.lngindustry.com/liquefaction/05092022/delfin-midstream-and-devon-energy-enter-into-lng-export-partnership/