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13 years is not long enough: Glencore and Cheniere Sign Long-Term LNG Deal11/16/2021
A liquefied natural gas (LNG) binding sale and purchase agreement (SPA) has been concluded between Cheniere Energy Inc. and Glencore plc.
Earlier last month, Cheniere announced that Glencore had entered into a free-on-board agreement with Cheniere Marketing for approximately 0.8 million tons of LNG per annum, starting in April 2023 for a period of 13 or more years.
LNG is sold per the SPA at a price index based on the Henry Hub price plus a fixed liquefaction fee.
With the signing of this long-term transaction, Cheniere solidifies its position as a global LNG provider, and the company looks forward to a successful long-term relationship with Glencore, one of the world's biggest commodities producers and a leading player in the global LNG market.
This SPA demonstrates the commercial momentum Cheniere has been enjoying and marks another important milestone in contracting LNG capacity, as the company lays the groundwork for a final investment decision on Corpus Christi Stage 3, which Cheniere expects to occur next year.
A total nominal production capacity of approximately 10 mtpa is being planned for Corpus Christi Stage 3 with up to seven midscale liquefaction trains. And all regulatory approvals have been received already.
Adding fuel to the deal, China Petroleum & Chemical Corp., a state-owned company, also signed two contracts last week to purchase LNG from a proposed Louisiana LNG project being developed by U.S. LNG company Venture Global.
Natural gas is now a critical part of a growing global economy, and Cheniere Energy, Inc. is the world's largest producer and exporter of LNG in the United States. The company is a full-service LNG provider, dealing with gas procurement and transportation, liquefaction, vessel chartering, and LNG delivery.
Chenieres’ Sabine Pass and Corpus Christi LNG plants on the Gulf Coast of the United States represent one of the largest LNG liquefaction platforms in the world, with a maximum production capacity expected to be 45 million tons per year. Cheniere is also exploring the potential of expanding its liquefaction operations and other projects within the LNG value chain. The company is located in Houston, Texas, and has offices in London, Singapore, Beijing, Tokyo, and Washington, D.C.
Glencore, for its part, is one of the world's largest globally diversified natural resource companies, which was founded in the 1970s as a trading company. Today, it is a major producer and marketer of commodities, comprising around 150 mining, metallurgical, and oil production assets with 135,000 people employed worldwide.
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Sempra Energy would develop the 4.0-mmtpa Vista Pacifico LNG export facility located next to the company's Terminal for Refined Products in Topolobampo in a bid to provide gas from the Permian basin in Texas and New Mexico to Asian markets. Once marketing begins, Sempra's management expects Vista Pacifico to be oversubscribed.
Expansion Is The Goal: Ironwood II Completes Asset Merger And Assumes Management of Nuevo Midstream Dos’ Eagle Ford Assets
Ironwood Midstream expanded its operations in the Eagle Ford region through its merger with Nuevo Midstream. Thanks to this, Ironwood II has increased its crude oil and natural gas throughput capacities in the famous shale to approximately 400,000 bbl/d and 410 MMcf/d, respectively. With 390 miles of pipelines, the company manages 245,000 acres of dedicated land.
Shareholder’s payout target was increased by 50% after the largest U.S. independent oil producer surpassed Wall Street’s earnings estimates on growing energy prices, said Houston-based Conoco Phillips Co. on Aug. 4. Due to Western sanctions on major producer Russia throttling energy supply amid a rebound in demand from pandemic lows, oil and gas #prices have soared. Crude has been trading more than 25% higher since the start of the year and results also benefited from high natural gas prices. Meanwhile, shares were down a fraction, to $91.03, in early trading but are up about 26% year to date. Conoco Phillips stated, that the average price obtained for a barrel of oil and gas accelerated 77% from a year earlier to $88.57. The company acknowledges that it has not hedged any of its oil and gas sales to make the most of higher market prices. The capacity of 1.69 million boe/d was in line with Wall Street estimates, however, the company expected the current quarter’s output would be between 1.71 million and 1.76 million boe/d.
California oil joint venture, Aera Energy, of Exxon Mobil Corp. and ShellPlc is being sold to German asset manager IKAV, according to the agreement of Sept. 1. Shell noted that the sale of its 51.8% membership interest in Aera Energy is for a total consideration of about $2 billion in cash with additional contingent payments based on future oil prices, subject to regulatory approval. However, the total transaction value was not disclosed. Being one of California’s largest oil and gas producers, Aera Energy accounts for nearly 25% of the state’s production. The sale by Exxon Mobil and Shell ends a 25-year-long partnership in California, meanwhile, it persists a streak of divestments of mature oil and gas properties by the two supermajors. Aera Energy LLC operates about 13,000 wells in the San Joaquin Valley in California, producing oil and associated gas. In 2021, Aera took out about 95,000 boe/d. Exxon Mobil’s interests in the Aera oil-production operation in California contained a 48.2% share of Aera Energy LLC and a 50% share of Aera Energy Services Co. held by Mobil California Exploration & Producing Co. Moreover, Exxon Mobil affiliates have signed a separate agreement for the sale of an associated loading facility and pipeline system. The sale effectively ends Shell’s upstream position in California. The company reported that the divestiture is valued to result in a post-tax impairment of $300 million to $400 million, subject to adjustments.
The completion of the merger between Centennial Resource Development Inc. and Colgate Energy Partners II LLC happened on Sept. 1, sealing the debut of Permian Resources Corp., which is considered the largest pure-play E&P company in the Delaware Basin. Permian Resources’ idea was to combine two successful E&P companies, creating a better, stronger, and more strategically compelling company. Centennial and Colgate announced an agreement to merge in May, denying rumors that Colgate, a privately held independent Midland-based company, had been seeking an IPO. The merger estimated Colgate at about $3.9 billion and consists of 269.3 million shares of Centennial stock, $525 million of cash, and the assumption of approximately $1.4 billion of Colgate’s outstanding net debt. Permian Resources, being the combined company, has a deep inventory of “high-quality” drilling locations on around 180,000 net acres the companies anticipate will provide more than $1 billion of free cash flow in 2023 at current strip prices, in accordance with the company release on Sept. 1.