Equinor and Cheniere have announced a new long-term sale and purchase agreement (SPA)
Equinor will purchase approximately 1.75 mta of LNG from on a free-on-board (FOB) basis for approximately 15 years from the commencement of delivery of the total amount of LNG volumes.
Deliveries will begin in 2027 and are expected to reach the full 1.75 mta towards the end of this decade.
The new agreement brings the total volumes the Norwegian major has contracted with Cheniere up to around 3.5 mta and double the volumes of LNG Equinor will export out of Cheniere’s LNG terminals on the US Gulf Coast.
More US LNG in its portfolio will allow Equinor to step up its role as a supplier of natural gas in global and European markets at a time when energy security is seen as crucial.
The LNG market is projected to grow significantly because of the role it will play in providing nations with energy security and to enable the eventual transition to a newer fuel mix in many markets.
Equinor senior vice president for gas and power Helge Haugane said, “I am pleased 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.”
The contract will help build momentum for Cheniere’s proposed Sabine Pass LNG expansion, which will add 20 mta to the Texan exporter’s capacity.
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