Cheniere Energy to purchase natural gas from Apache

Cheniere Energy’s subsidiary Cheniere Corpus Christi Liquefaction Stage III has signed a long-term gas supply agreement (GSA) with Apache Corporation.

Cheniere Corpus Christi Stage III has agreed to purchase 140,000 metric million British thermal units (mmBtu) a day of natural gas from Apache for a term of 15 years, under the terms of the agreement.

The approximately 0.85Mtpa of LNG associated with this gas supply will be marketed by Cheniere.

Cheniere Energy president and CEO Jack Fusco said: “This first-of-its-kind long-term agreement with Apache represents a commercial evolution in the US LNG industry, as it will ensure the continued reliable delivery of natural gas to Cheniere from one of the premier producers in the Permian Basin, while enabling Apache to access global LNG pricing and receive flow assurance for its gas.

“This commercial agreement, which is expected to support the Corpus Christi Stage III project, reinforces Cheniere’s track record of creating innovative, collaborative solutions to meet customers’ needs and support Cheniere’s growth.”

Apache chief executive officer and president John J Christmann said: “Apache’s agreement with Cheniere is part of the company’s long-term strategy to leverage the scale of our assets in the Permian Basin and diversify our customer base and cost structure by accessing new markets for natural gas produced at Alpine High.”

Under this agreement, Apache will secure an LNG price, net of a fixed liquefaction fee and some costs incurred by Cheniere for the natural gas supplied to Corpus Christi Stage III.

Up to seven midscale liquefaction trains are being developed as part of the Corpus Christi Stage III project. The total expected nominal capacity of these trains is approximately 9.5Mtpa of LNG.

In March, Corpus Christi Stage III received a positive opinion on Environmental Assessment from the US Federal Energy Regulatory Commission (FERC). The project is expected to receive other regulatory approvals in the last quarter of this year.

Both based in the US, Cheniere Energy is a liquefied natural gas company while Apache Corporation is engaged in the exploration of hydrocarbons.