Cheniere Energy has entered into a 22-year LNG supply agreement with Brazil’s Petrobras, creating another long-term customer for the U.S. liquefied natural gas producer as it evaluates further expansion of its Gulf Coast export business. Under the sale and purchase agreement, Petrobras will purchase approximately 800,000 tonnes of LNG per year from Cheniere Marketing on a free-on-board basis.
The free-on-board arrangement generally places responsibility for ocean transportation with the buyer once the LNG has been loaded, providing Petrobras with flexibility regarding the destination of the cargoes. The agreement adds another long-duration commitment to Cheniere’s LNG business and provides a defined supply arrangement extending into the second half of this century.
“We are pleased to enter into this multi-decade agreement with Petrobras, one of the largest energy companies in the world,” said Jack Fusco, Cheniere’s chairman, president and CEO.
Fusco said the agreement provides additional commercial support and fixed-fee cash flow visibility as Cheniere considers further brownfield liquefaction growth.
“We look forward to providing our secure and reliable LNG to Petrobras into the second half of this century under this new long-term agreement,” he added.
The LNG supply agreement therefore gives Cheniere another established commercial commitment while the company continues to assess additional liquefaction opportunities across its Gulf Coast facilities.
Cheniere Continues Gulf Coast LNG Expansion
The Petrobras agreement comes as Cheniere continues to expand one of the world’s largest LNG export platforms. The Houston-based company operates the Sabine Pass LNG terminal in Louisiana and Corpus Christi LNG facility in Texas, together representing approximately 56 million tonnes per annum of combined production capacity.
Cheniere says another roughly 5 mtpa of capacity is under construction, including estimated debottlenecking opportunities. The Petrobras agreement follows the recent completion of Cheniere’s major Stage 3 expansion at Corpus Christi. The company also marked its 5,000th LNG cargo the following day, when the LNG carrier Yari departed Sabine Pass bound for Asia. Cheniere reached that milestone just over a decade after shipping its first LNG cargo from Sabine Pass in 2016.
Petrobras Contract Adds Long-Duration Commitment
Cheniere has said it is continuing to pursue additional liquefaction expansion opportunities at its Gulf Coast facilities. Against that backdrop, the LNG supply agreement with Petrobras adds another long-duration commitment as the company weighs its next phase of growth. The agreement covers approximately 800,000 tonnes of LNG per year and further connects Cheniere’s existing export operations with Petrobras through a multi-decade supply arrangement. With the agreement in place, Cheniere continues to build on its long-term commercial commitments while considering additional growth at its Gulf Coast facilities.
