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Cheniere and Chevron sign long-term LNG SPAs

Published by , Editorial Assistant
LNG Industry,

Cheniere Energy has announced that two of its subsidiaries, Sabine Pass Liquefaction, LLC (SPL), and Cheniere Marketing, LLC, have each entered into long-term LNG Sales and Purchase Agreements (SPA) with Chevron U.S.A. Inc. (Chevron), a wholly-owned subsidiary of Chevron Corporation. At plateau, Chevron will purchase a combined 2.0 million tpy of LNG from Cheniere subsidiaries, subject to certain conditions described below.

Under the first SPA, Chevron has agreed to purchase approximately 1.0 million tpy of LNG from SPL on an FOB basis. Deliveries under the SPA will begin in 2026, reach the full 1.0 million tpy during 2027, and continue until mid-2042. Under the second SPA, Chevron has agreed to purchase approximately 1.0 million tpy of LNG from Cheniere Marketing on an FOB basis, with deliveries beginning in 2027 and continuing for approximately 15 years. The Cheniere Marketing SPA is subject to Cheniere making a positive Final Investment Decision (FID) to construct additional liquefaction capacity at the Corpus Christi LNG Terminal beyond the seven-train Corpus Christi Stage III Project. The purchase price for LNG under the SPAs is indexed to the Henry Hub price, plus a fixed liquefaction fee.

Additionally, Cheniere’s subsidiary, Sabine Pass LNG (SPLNG), and Chevron have agreed to terms for the early termination of their LNG Terminal Use Agreement (the TUA) in return for a lump sum payment to be made by Chevron to SPLNG during calendar year 2022. Termination of the TUA is subject to the consent of certain leaders to Cheniere Energy Partners, L.P., expected during 3Q22.

Anatol Feygin, Cheniere’s Executive Vice President and Chief Commercial Officer, said: “These long-term SPAs underscore the growing demand for reliable, cleaner burning LNG supply beyond 2040 and further support investment in additional LNG capacity beyond our Corpus Christi Stage III Project.”

“Our strategy is to deliver lower carbon energy to a growing world,” said Colin Parfitt, Chevron Vice President, Midstream. “Our agreements with Cheniere allow us to harness growing US natural gas production and Gulf Coast LNG export capacity to help meet long-term demand for affordable, reliable, and ever cleaner energy.”

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