QatarEnergy signs two deals with Cheniere for up to 4 million tons of US LNG a year

QatarEnergy said it has signed two long-term agreements with US energy company Cheniere Energy to buy up to 4 million tons of liquefied natural gas (LNG) a year through 2054. Deliveries are expected to begin in 2031, according to Anadolu Agency, which reported QatarEnergy's announcement on Thursday. The LNG will come from Cheniere's Sabine Pass facility in Louisiana and its Corpus Christi facility in Texas, both on the US Gulf Coast.

Key numbers

• 4 million tons — the most LNG QatarEnergy will buy a year under the two agreements, per Anadolu Agency
• 2 million tons — the annual purchase from each facility, per Anadolu Agency, citing a Cheniere statement
• 2031 to 2054 — the delivery period, per Trend News Agency
• 1 million tons — the annual volume under the Sabine Pass agreement that depends on a positive final investment decision on the first phase of the planned expansion, per Anadolu Agency, citing Cheniere
• approximately 56 million tons — the combined annual production capacity of Sabine Pass and Corpus Christi, per Anadolu Agency
• up to about 20 MMtpy — the peak capacity the Sabine Pass expansion could add, including estimated gains from debottlenecking, per Pipeline and Gas Journal

Anadolu Agency reported that the LNG will be delivered on a free-on-board (FOB) basis, meaning QatarEnergy takes responsibility for the shipments at the loading ports. Cheniere said in a separate statement that prices are indexed to the US Henry Hub natural gas benchmark plus a fixed fee, Anadolu Agency reported. News.az carried the same terms, citing Cheniere. Pipeline and Gas Journal described the supply period as running from the "early 2030s" through 2054.

The agreements were signed by Saad Sherida Al-Kaabi, Qatar's Minister of State for Energy Affairs and QatarEnergy President and CEO, and Jack Fusco, Cheniere Chairman, President and CEO. Trend News Agency quoted Al-Kaabi as describing them as "an important milestone in our LNG strategy". He also said: "This major long-term purchase will expand and diversify our global LNG portfolio and advance our ability to meet the evolving requirements of the market." Anadolu Agency reported that he added the extra volumes would complement QatarEnergy's existing LNG supplies, strengthen its trading portfolio and improve its ability to serve customers worldwide.

Anadolu Agency reported that Fusco described the agreements as a long-term commercial commitment that reinforced Cheniere's position in the US LNG industry. Pipeline and Gas Journal said the Sabine Pass expansion could lift the terminal's total capacity to more than 50 MMtpy, a figure Anadolu Agency also gave as more than 50 million tons. Trend News Agency, citing the company's description, said Sabine Pass has six operational liquefaction units with an aggregate nominal capacity of approximately 30 mtpa, and that Corpus Christi has 10.

Anadolu Agency said the agreements come amid heightened tensions in the Middle East and disruptions to energy shipments through the Strait of Hormuz, a waterway connecting the Gulf with international markets. It reported that Qatar, one of the world's leading LNG exporters, relies heavily on maritime routes through the strait to deliver gas to customers in Asia and Europe. According to Anadolu Agency, the purchase of US-produced LNG is expected to give QatarEnergy supply options outside the Gulf and reduce its reliance on shipments originating from the region. News.az referred to uncertainty in global energy markets alongside the regional tensions.