Cheniere Signs 22-Year LNG Supply Agreement With Petrobras
Cheniere Energy has signed a 22-year liquefied natural gas supply agreement with Brazilās state-controlled energy company Petrobras, securing another long-term customer for U.S. LNG exports as the American producer evaluates further expansion along the Gulf Coast.
Under the agreement, Petrobras will purchase approximately 800,000 tonnes of LNG per year from Cheniere Marketing on a free-on-board basis.
The companies did not disclose when deliveries will begin or reveal the pricing formula for the long-term contract.
Petrobras Takes Control of Shipping
The agreementās free-on-board structure means Cheniere will deliver the LNG onto the vessel at its export facility, while Petrobras will generally be responsible for arranging transportation after loading.
That structure gives the Brazilian energy company greater flexibility over the destination and logistics of individual cargoes.
Cheniere Chairman, President and CEO Jack Fusco described Petrobras as one of the world's major energy companies and said the agreement provides additional commercial support for Cheniere's LNG business.
The company also said the long-term contract provides greater visibility into fixed-fee cash flows as it considers additional brownfield liquefaction projects.
Cheniere Expands Its LNG Export Platform
The Petrobras agreement comes as Cheniere continues to operate one of the world's largest LNG export businesses.
The Houston-based company operates the Sabine Pass LNG facility in Louisiana and Corpus Christi LNG in Texas. Together, the facilities have approximately 56 million tonnes per annum (mtpa) of LNG production capacity.
Another roughly 5 mtpa of capacity is under construction or associated with debottlenecking opportunities, according to Cheniere.
The company recently completed the major Stage 3 expansion at Corpus Christi, adding substantially to its production capabilities.
The seventh and final Stage 3 liquefaction train reached substantial completion on August 28, increasing Cheniere's overall LNG production capacity by more than 20%.
5,000th LNG Cargo
The Corpus Christi expansion milestone was followed by another significant achievement for Cheniere.
On August 29, the LNG carrier Yari departed Sabine Pass carrying what Cheniere identified as its 5,000th LNG cargo, bound for Asia.
The milestone came just over a decade after Cheniere shipped its first LNG cargo from Sabine Pass in 2016, reflecting the rapid growth of U.S. LNG exports during that period.
Long-Term Contracts Support Further Growth
For Cheniere, the Petrobras agreement adds another long-duration commitment to its portfolio at a time when the company is considering additional liquefaction opportunities at its existing Gulf Coast sites.
Long-term sales agreements can provide LNG producers with greater visibility over future demand and revenue while supporting investment decisions for new or expanded export capacity.
For Petrobras, the agreement provides another source of LNG supply for Brazil, where natural gas plays an important role in electricity generation, industrial activity and the country's broader energy system.
The 22-year duration also extends well into the 2040s, making the agreement a long-term component of Petrobras' LNG procurement strategy.
Cheniere said it expects to supply Petrobras through the second half of this century under the new agreement, adding another major international buyer to the company's growing portfolio of long-term LNG customers.