QatarEnergy agrees to buy 4 million tonnes of US LNG a year through 2054

QatarEnergy said on 22 October that it had signed two long-term sale and purchase agreements with Cheniere Energy to buy a combined 4 million tonnes of liquefied natural gas (LNG) a year from the United States. The volumes will come from the Sabine Pass facility in Louisiana and the Corpus Christi facility in Texas. Deliveries on a free-on-board basis are expected to begin in 2031 and continue through 2054.

Cheniere’s announcement says the agreements cover 2 million tonnes a year from each facility. Under FOB terms, cargoes are delivered on board ships at the export facility. QatarEnergy said the purchases will complement its existing supplies and diversify its global LNG portfolio.

Cheniere said the purchase price will be indexed to the Henry Hub natural-gas benchmark plus a fixed fee. That is the pricing formula disclosed for the agreements; the companies did not disclose the benchmark price, fixed fee or delivery profile needed to calculate the total cost. No overall contract value can therefore be derived from the announcements.

The full volume is not subject to identical conditions. Cheniere said 1 million tonnes a year under the Sabine Pass agreement is contingent on a positive final investment decision for the first phase of the Sabine Pass expansion project. The condition makes an expansion decision relevant to part of the announced annual total.

Sabine Pass is in Louisiana and Corpus Christi is in Texas. QatarEnergy’s release confirms the contracts are linked to two separate facilities on the US Gulf Coast. Cheniere also described the expansion project’s expected addition of about 20 million tonnes of annual production capacity and a potential rise of total Sabine Pass capacity to more than 50 million tonnes; those are project expectations and are separate from the volumes in the new purchase agreements.

QatarEnergy President and Chief Executive Saad Sherida Al-Kaabi said the agreements would contribute to the company’s strategy to expand and diversify its global LNG portfolio. The announcements establish contracted long-term purchase volumes and a delivery period. They do not specify how future prices will move or which customers will receive the additional gas.

Cheniere’s expansion disclosure helps explain why the conditional Sabine Pass volume must be treated separately. The company said the first phase is expected to include one liquefaction train, Train 7, a boil-off-gas re-liquefaction unit and supporting infrastructure. It put the expected production capacity of that phase at more than 6 million tonnes a year. The wider expansion project is expected to add peak capacity of about 20 million tonnes a year. These are company project plans and must not be added to the 4 million tonnes a year contracted for QatarEnergy.