LNG

June 18 (LNGJ) - Cheniere Energy, the largest US LNG producer with the Sabine Pass and Corpus Christi plants and their expansion projects, has received board approval for an increase in its share repurchase authorisation by an additional $4 billion through 2027, and for a plan to increase its quarterly dividend by 15 percent to $2.00 per common share annualised, commencing with the third quarter 2024.

    Cheniere noted that the capital allocation plan started in 2022 to enable investment in growth projects while returning capital to shareholders. Share repurchases allow companies to re-invest in themselves while boosting the value of the shares as there are fewer outstanding. “Cheniere has funded accretive brownfield growth, bringing the Corpus Christi Stage 3 project to over 60 percent completion, repurchased 10 percent of shares outstanding while growing its dividend by over 30 percent,” Cheniere said.

Cheniere Energy, the largest US liquefied natural gas exporter, shipped 166 LNG cargoes in the first quarter of 2024, though net profits were hit be unfavourable changes to the fair value of derivatives.

Cheniere Energy, the owner of the Sabine Pass liquefaction and export plant in Louisiana and the Corpus Christi facility in Texas, has signed another long-term LNG sale and purchase agreement with Equinor, the Norwegian LNG and pipeline gas supplier to Europe.

Under the latest SPA, Equinor has agreed to purchase about 1.75 million tonnes per annum of LNG from the Cheniere Marketing unit of the Houston, Texas-based company on a free-on-board (FOB) basis for a purchase price indexed to the Henry Hub price, plus a fixed liquefaction fee.

Delivery of half of the volume associated with the SPA will commence in 2027 and delivery of the remaining half, which is subject to a positive Final Investment Decision with respect to the first Train of the Sabine Pass Liquefaction Expansion Project, will start at the end of the 2020s. 

The Sabine Pass deal follows an SPA signed with Equinor in June 2022, also for 1.75 MTPA of volumes, from the Corpus Christi LNG expansion.

Half of the Corpus Christi volumes, or about 900,000 tonnes, were subject to Cheniere making a positive FID to construct additional liquefaction capacity at the Corpus Christi facility beyond the seven-Train Corpus Christi Stage III Project

The terms of the Sabine SPA is 15 years from the commencement of delivery of the full 1.75 MTPA of LNG volumes to Equinor, which also operates its own LNG export plant in northern Norway at Hammerfest, supplying European import terminals.

The Equinor Hammerfest plant in Norway had initially been built and started in 2007 to send LNG cargoes to the US before the shale-gas boom began the liquefaction and export build-out in the Lower 48 states of the US.

Project

The Sabine expansion will comprise three large-scale liquefaction Trains, each with capacity of 6.5 MTPA, a boil-off-gas re-liquefaction unit with output of 750,000 tonnes a year and two 220,000 cubic metres capacity storage tanks.

Cheniere has engaged US engineering company Bechtel Energy to complete a front-end engineering and design study of the Sabine Pass project.

“We are pleased to expand our relationship with Equinor, one of Europe’s leading energy companies, building upon the SPA we executed last year,” said Jack Fusco, Cheniere’s President and Chief Executive.

“This SPA underscores Cheniere’s and Equinor’s shared vision of an energy future built upon reliable, flexible, and cleaner energy solutions,” Fusco stated.

“It will 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,” the CEO added. 

Helge Haugane, Equinor’s senior vice president for Gas & Power, said he was very pleased to sign the long-term agreement with Cheniere.

“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,” stated Haugane.

FERC process

The Cheniere group in May 2023 entered the pre-filing review process with respect to the Sabine expansion with the Federal Energy Regulatory Commission under the National Environmental Policy Act.

Cheniere has also recently signed a long-term SPA with the South Korean utility company, Korea Southern Power (KOSPO) for the Sabine expansion.

KOSPO agreed to purchase 400,000 tonnes per annum of cargoes, which will be delivered ex-ship whereby Cheniere will supply the transportation.

Cheniere said it would begin delivering a smaller amount to the Koreans in 2024, though the full SPA runs from 2027 through to 2046.

The Houston company is additionally progressing with the expansion at the Corpus Christi plant where three liquefaction Trains currently produce 15 MTPA.

The Stage 3 expansion is adjacent to the existing plant and consists of seven mid-scale Trains with an total production capacity of over 10 MTPA.

It is also proceeding with an additional Corpus Christi expansion known as the Corpus Christi mid-scale Trains 8 and 9 project.

Cheniere Energy has signed a long-term liquefied natural gas sale and purchase agreement with the South Korean utility company, Korea Southern Power (KOSPO) for the Sabine Pass expansion project.

Cheniere Energy, the largest US LNG exporter, shipped 167 cargoes in the first quarter from the Sabine Pass plant in Louisiana and the Corpus Christi facility in Texas as it also swung to profits of $5.43 billion compared with $865M of losses in the prior-year quarter.

Cheniere Energy, the largest US LNG exporter from the Sabine Pass plant in Louisiana and Corpus Christi in Texas, said it had the long-term potential to reach 90 million tonnes per annum of production using brownfield sites at both facilities as it raised its 2022 and future earnings forecasts.

Thailand’s state energy operator PTT Public Company Limited (PTT) has secured long-term liquefied natural gas volumes by signing a firm supply deal with the largest US exporter Cheniere Energy.

The PTT subsidiary, PTT Global LNG Company Ltd (PTTGL), signed the sale and purchase agreement with Cheniere to book cargoes from the Corpus Christi export plant in Texas.

Under the SPA, PTTGL has agreed to purchase 1 million tonnes per annum of LNG from Corpus Christi Liquefaction for 20 years beginning in 2026.

The agreement is for a combination of both free-on-board (FOB) shipments and delivered ex-ship (DES) cargoes.

“This customized structure represents a further evolution in Cheniere’s commercial offerings tailored to the specific needs of LNG customers around the world,” said the Houston, Texas-based company.

The purchase price for LNG under the SPA is indexed to the US benchmark Henry Hub natural gas price, plus a fixed liquefaction fee.

Auttapol Rerkpiboon, PTT’s President and Chief Executive, said that by year-end PTT’s LNG receiving capacity will increase with a new terminal in commercial operation.

New terminal

Thailand’s new Nong Fab LNG facility in Rayong province, the nation’s second onshore import terminal, has received first volumes of LNG for commissioning and is on track for full commercial start-up at the end of 2022.

PTT is expanding regasification capacity and LNG imports after completing several expansions at the single existing Thai import terminal at Map Ta Phut, which can now handle 11.5 MTPA.

The Nong Fab terminal is adjacent to the Map Ta Phut industrial area in Rayong and will have total regasification capacity of 7.5 MTPA.

“LNG as is a major transition fuel which supports both energy security and sustainability,” said PTT CEO Auttapol.

“Our ambition is to move forward with the future energy while ensuring energy security. We actively engage in the LNG business and target to be a global LNG player by managing an LNG portfolio of 9 MTPA by 2030,” he stated.

Jack Fusco, Cheniere’s President and Chief Executive, said he was pleased to enter into this 20-year SPA with a subsidiary of PTT.

“This is the first direct LNG contract from a US LNG producer for PTTGL, and this agreement not only reflects the critical need for long-term, reliable LNG supply across the globe, but also the important role LNG has to play in powering growing economies for decades to come,” Fusco declared. 

Cheniere Energy, the largest US LNG exporter from its six-Train Sabine Pass plant in Louisiana and its three-Train facility at Corpus Christi in Texas and with expansion plans, has signed another long-term sale and purchase agreement with PetroChina.

PetroChina is the Hong Kong-listed unit of China National Petroleum Corp. (CNPC) and has a stake in Shell’s Canada LNG project in British Columbia.

CNPC itself additionally has shareholdings in two Russian Arctic LNG projects and in ExxonMobil’s stalled Mozambique LNG export venture.

Under the SPA with Cheniere, PetroChina subsidiary PetroChina International (PCI) has agreed to purchase up to 1.8 million tonnes per annum of LNG from the Cheniere Marketing unit on a free-on-board basis whereby the Chinese provide their own shipping.

Deliveries under the SPA will begin in 2026 and reach the full 1.8 MTPA in 2028 and they will continue through 2050.

The purchase price for LNG under the SPA is indexed to the Henry Hub price, plus a fixed liquefaction fee.

Expansion volumes

Half of the total 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 plant beyond the expansion with seven mid-scale Trains already approved and known as the Corpus Christi Stage 3 Project.

“We are pleased to build upon our existing and successful long-term relationship with PetroChina and sign our first LNG contract that crosses over into the second half of this century,” said Jack Fusco, Cheniere’s President and Chief Executive.

“PetroChina is a leading energy company in one of the largest and fastest growing markets for LNG,” added Fusco.

“This SPA increases Cheniere’s long-term sales to PetroChina to approximately 3 MTPA, and we are proud to support China’s progress toward a lower-carbon future with our reliable, cleaner burning LNG,” declared the Cheniere CEO.

The Executive Chairman of PCI, Tian Jinghui, also commented on the LNG agreement with the Houston-based company.

“Natural gas continues to play a vital role in enabling energy transition in China,” said Tian.

“We are pleased to further expand our cooperation with Cheniere in delivering LNG, one of the cleanest fuel choices to our millions of customers for many years to come,” he added. 

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.

Cheniere Energy, the largest US LNG export and owner and operator of the Sabine Pass plant in Louisiana and the Corpus Christi facility in Texas, posted first-quarter revenues of $7.48Bln compared with $3.09Bln in the prior-year quarter, though still posted a substantial net loss citing accounting reasons.