Equinor, the Norwegian oil and gas major and main pipeline natural gas supplier to Europe amid diminishing Russian deliveries from Gazprom, will be an LNG trader with additional volumes supplied by the largest US LNG exporter Cheniere Energy.
Under a planned 15-year agreement Equinor will purchase around 1.75 million tonnes of LNG per annum from Houston-based Cheniere from 2026.
“This new Sales and Purchase Agreement (SPA) will add new volumes to Equinor’s already significant gas portfolio of pipeline gas and LNG,” stated Equinor.
The Norwegian company also disclosed that the expansion at Corpus Christi to add 10 MTPA to the current nameplate capacity of 13.5 MTPA will likely be followed by another boost in output.
“With global energy demand growing and increased focus on energy security, the LNG market is expected to grow significantly. US LNG can supply the European markets as well as cover demand in other markets,” explained Equinor.
The Stavanger, Norway-based oil and gas major has recently shipped the first cargo from the repaired Hammerfest in Northern Norway to re-established seaborne LNG supply link Europe.
New US volumes
It was the first cargo to leave the Hammerfest liquefaction and export plant since the September 2020 fire.
Once the Hammerfest is ramped up to full production of 4.8 MTPA, a ship will leave the facility on Melkøya island every five or six days and over the year will deliver 5 percent of Norway’s natural gas exports while the other 95 percent is delivered by pipelines.
Norway’s role as a key supplier to Europe has taken on more importance because of the Russian invasion of Ukraine and Western sanctions against Russian oil and gas.
The Hammerfest project gave Europe its first large-scale LNG supply when it came on stream in 2007, though the facility was originally planned and built to supply the US before the shale-gas boom.
“I am very pleased that we have entered into a long-term agreement with Cheniere, the largest US producer of LNG,” said Helge Haugane, Equinor’s senior vice president Gas & Power.
“Based on our production in Norway, Equinor is the second-largest supplier of pipeline gas to Europe. The new LNG agreement is a major building block in Equinor’s ambition to further strengthen our global gas position by adding more LNG to the portfolio,” Haugane explained.
Crucial role
“LNG will play a crucial role in providing energy security. By increasing our position in this segment, we will be even better positioned as a long-term reliable supplier of energy’ he stated.
Under the SPA, Equinor has agreed to purchase the volumes from Cheniere Marketing on a free-on-board basis whereby the Norwegians send their own ships.
Equinor said the deliveries under the SPA would start in the second half of 2026 and reach the full 1.75 MTPA in the second half of 2027.
“Half of the volume, or about 900,000 tonnes, is subject to Cheniere making a positive final investment decision to construct additional liquefaction capacity at the Corpus Christi LNG Terminal beyond the seven-Train Corpus Christi Stage III Project,” stated Equinor.
This suggests that the Cheniere, which operates the Sabine Pass plant in Louisiana with 27 MTPA of production, is planning yet another expansion at the Texas facility.
