Cheniere, Equinor in 15-year SPA from Sabine Pass
US LNG developer Cheniere Energy and Norway’s Equinor said June 21 they had entered into a 15-year sales and purchase agreement (SPA) that will double the volume of LNG Equinor takes from Cheniere’s Sabine Pass liquefaction facility in Texas.
The new SPA is for 1.75mn tonnes/year of LNG, with half the volumes starting from 2027, and brings Equinor’s total offtake from Cheniere to 3.5mn tonnes/year. Delivery of the other half remains subject to a positive final investment decision (FID) for the first train of Cheniere’s planned Sabine Pass Liquefaction (SPL) Expansion Project, but is expected to commence at the end of this decade.
All volumes are sold free-on-board at a purchase price indexed to Henry Hub, plus a fixed liquefaction fee, Cheniere said.
“This SPA underscores Cheniere’s and Equinor’s shared vision of an energy future built upon reliable, flexible, and cleaner energy solutions,” Cheniere CEO Jack Fusco said. “This SPA is expected to provide further commercial support to the SPL Expansion Project, which we continue to rigorously develop in order to meet the world’s growing demand for secure, long-term energy supplies and the economic and environmental benefits of Cheniere’s LNG.”
The SPL Expansion Project is being developed to include up to three trains with a total production capacity of about 20mn tonnes. Cheniere entered the pre-filing process at the Federal Energy Regulatory Commission (FERC) earlier this year, targeting a construction start in Q4 2025, and all three trains are expected to be in commercial service in the second half of 2032, although individual trains could be commissioned earlier.
With the additional LNG volumes from Cheniere, Equinor expects to expand its role as a supplier of natural gas in global markets while maintaining its position as the major supplier to Europe.
“Europe will need natural gas to ensure flexible energy on demand to support the build-out of more intermittent renewables and LNG will play an important role,” said Helge Haugane, Equinor’s senior vice president for gas & power. “In other markets, for example in Asia, demand for LNG is expected to grow as a solution to energy security as well as lower emissions. Equinor has an ambition to strengthen its role as a leading supplier of natural gas and with our supply agreements with Cheniere we are expanding our global position.”