Wednesday, 21 June 2023, Equinor and Cheniere have announced a new 15-year purchase agreement of around 1,75 million tonnes of LNG per year, with half of the volume starting from 2027. This agreement brings the total volumes that Equinor has contracted with Cheniere up to around 3.5 million tonnes per year.
This new Sales and Purchase Agreement (SPA) with Cheniere will double the volumes of LNG that Equinor will export out of Cheniere’s LNG terminals on the U.S. Gulf coast.
The LNG market is expected to grow significantly because of the role it will play in providing energy security as well enabling a transition to a cleaner energy mix in many markets. With more US LNG in its portfolio, Equinor will increase its role as a supplier of natural gas in global markets while maintaining its position as the major supplier of natural gas to Europe.
“I am very pleased that we have entered into another 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 as well as lower emissions. Equinor has an ambition to strengthen its role as a leading supplier of natural gas and with our supply agreements with Cheniere we are expanding our global position”, said Helge Haugane, Equinor’s senior vice president for Gas & Power.
Under the SPA, Equinor has agreed to purchase approximately 1.75 million tonnes per annum (“mtpa”) of LNG from Cheniere Marketing on a free-on-board basis for a term of approximately 15 years from the commencement of delivery of the total amount of LNG volumes. The deliveries under the SPA will start in 2027 and is expected to reach the full 1.75 mtpa towards the end of this decade.