Cheniere in gas supply deal with Canada’s ARC Resources
US LNG developer Cheniere Energy said May 4 it had entered into a long-term gas supply agreement with Canada’s ARC Resources that will deliver 140mn ft3/day of Montney gas to Cheniere’s Corpus Christi Stage III liquefaction project in Texas.
The integrated production marketing (IPM) agreement mirrors an earlier deal Cheniere struck with Canada’s Tourmaline Oil last summer. It’s a 15-year deal that will begin with commercial operations of Train 7 at Corpus Christi Stage III, which incorporates seven midscale liquefaction trains with a total capacity of more than 10mn mt/yr.
|
Advertisement: The National Gas Company of Trinidad and Tobago Limited (NGC) NGC’s HSSE strategy is reflective and supportive of the organisational vision to become a leader in the global energy business. |
The gas will yield about 0.85mn mt/yr of LNG, which Cheniere will market, largely in Asia. ARC Resources will be paid an LNG-linked price for its gas, based on the Platts Japan Korea Marker (JKM), after deductions of fixed LNG shipping costs and a fixed liquefaction fee. Lacking access to Canadian LNG production capacity, such deals are the only way for Canadian gas producers to tap into lucrative global natural gas markets.
The IPM agreement remains subject to a final investment decision on Corpus Christi Stage III, which Cheniere CEO Jack Fusco said is expected this summer.
“We are pleased to enter into this long-term IPM agreement with one of Canada’s largest natural gas producers, enabling Canadian natural gas to reach international markets,” he said. “This commercial agreement further demonstrates Cheniere’s ability to create collaborative, innovative tailored solutions that meet the needs of our customers.”