Cheniere Energy has reached a sale and purchase agreement (SPA) to sell liquified natural gas to a subsidiary of the Switzerland-based Glencore, the company announced Monday.
The 13-year agreement, which is scheduled to begin in April 2023, would represent another step forward in Cheniere’s effort to build a third segment at its Corpus Christi, Texas, LNG export facility.
Under the terms of the agreement, the multinational commodity trading and mining company has agreed to purchase 0.8 million tonnes per annum of LNG from Cheniere. The purchase price will be indexed to the US Henry Hub natural gas price, plus a fixed liquefaction fee.
“We are pleased to announce this long-term SPA with Glencore, one of the world’s largest producers and marketers of commodities and a significant player in the global LNG market,” said Jack Fusco, Cheniere’s president and chief executive.
“We look forward to a successful long-term relationship with Glencore. This SPA further builds upon Cheniere’s commercial momentum, marking another important milestone in contracting our LNG capacity ahead of a final investment decision of Corpus Christi Stage 3, which we expect to occur next year.”
The Corpus Christi Stage 3 project, which remains under development, could include as many as seven midscale liquefaction trains with nominal production capacity of approximately 10 million tpa.
Currently, Cheniere’s Corpus Christi facility has three operating liquefaction trains with a fourth under construction, and a production capacity of approximately 15 million tpa.
In July, Cheniere announced a 15-year agreement with Canada’s Tourmaline Oil to provide natural gas for the Corpus Christi facility.
According to the agreement, Tourmaline will sell 140 billion British thermal units per day of natural gas to Cheniere, which will then liquefy the gas for export.
Fusco said at the time that the gas purchased from Tourmaline would “support” Corpus Christi Stage 3.