QatarEnergy, the Qatari state energy company and one of the world’s largest LNG producers, agreed Thursday to buy 4 million metric tons a year of US liquefied natural gas from Cheniere Energy (NYSE: LNG) through 2054, as the Iran war has sharply cut its own exports.
Two Cheniere subsidiaries, Sabine Pass Liquefaction in Louisiana and Corpus Christi Liquefaction in Texas, each signed a sale and purchase agreement for 2 million metric tons a year. QatarEnergy will collect the cargoes at the US terminals and arrange its own shipping, and it will pay the Henry Hub benchmark price plus a flat fee. Shipments start early in the 2030s and run until the end of 2054. One million metric tons a year of the Sabine Pass volume depends on Cheniere approving the first expansion phase. The release does not say when Cheniere will decide.
The expansion would add up to about 20 million metric tons a year of peak capacity, including debottlenecking, and lift Sabine Pass above 50 million. Phase 1 covers one new liquefaction train and supporting infrastructure that would add more than 6 million metric tons a year, and Cheniere hired Bechtel Energy in May to build it.
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Cheniere Chairman, President and CEO Jack Fusco called the contracts “pivotal, multi-decade agreements” and said the company’s operating record and reliability earned the business.
Qatar’s LNG exports from April through September fell almost 90% from a year earlier, and deliveries had climbed back to only about a third of prewar levels at month’s end, after Qatar began ferrying cargoes across the Strait of Hormuz. Attacks on tankers have continued. QatarEnergy extended force majeure notices in late September to buyers including Pakistan, Bangladesh and Italy’s Edison, which says it will receive no Qatari cargoes until December. Edison has replaced 23 of the 35 cargoes it lost, mainly with US supplies.
Iranian missile strikes in March also damaged two of Ras Laffan’s 14 trains, cutting 12.8 million metric tons a year of capacity, and QatarEnergy CEO Saad Sherida al-Kaabi said then that repairs would last three to five years.
Al-Kaabi, who is also Qatar’s minister of state for energy affairs, said Thursday the purchase will “expand and diversify our global LNG portfolio.” Ships leaving the US Gulf Coast reach customers without crossing the Strait of Hormuz. The deal is QatarEnergy’s first US offtake agreement, although the company also holds the majority stake in the Golden Pass export plant in Texas, now starting up.
