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13 years is not long enough: Glencore and Cheniere Sign Long-Term LNG Deal
11/16/2021
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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Pivot to the South: LNG Plants Under Development by Sempra Energy in Louisiana and Mexico
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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
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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.
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In order to sell its part of the sprawling Eagle Ford Shale acreage, Chesapeake Energy Corp. on January 18 concluded an agreement to trade its Brazos Valley region assets to WildFire Energy I LLC for $1.425 billion.
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On January 6, Phillips 66 announced that it plans to acquire more than 43% of DCP Midstream LP for $3.8 billion, expanding the business in the oil & gas business.
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On January 5 Northern Oil & Gas (NOG) concluded a deal to acquire working interests in Midland-Petro D.C. Partners LLC (MPDC)'s Mascot Project in the Midland Basin, according to a January 9 press release. Firstly estimated at $330 million in cash, the deal was signed with an additional 3.25% working interest added to the 36.7% agreed upon when the transaction was announced on October 19. NOG paid $29 million more for the additional interests, which now totalled 39.958%. Finally, the deal closed for $320 million in cash and $43 million in debt at signing in October with the finance of Minnetonka, Minn.-based NOG with cash on hand, operating free cash flow, and assistance from its revolving credit facility.