Cheniere strikes deal to buy gas from CNRL

US LNG exporter Cheniere Energy announced on May 28 that it had struck a deal to buy natural gas from Canadian Natural Resources Ltd (CNRL).

Under the integrated production marketing (IPM) supply agreement, a CNRL subsidiary will sell 140,000mn British thermal units (3.9mn cubic metres) per day of gas to Cheniere Marketing. The gas will be supplied over a period of 15 years that is expected to begin in 2030.

The announcement suggests that the gas will be used to supply the planned Sabine Pass Liquefaction (SPL) expansion project. Cheniere said the agreement was contingent on it taking a final investment decision (FID) on that expansion. The SPL expansion is being planned to have a production capacity of up to 20mn tpy of LNG, inclusive of debottlenecking opportunities.

The supply agreement is expected to result in the production of around 850,000 tonnes per year (tpy) of LNG, which will be marketed by Cheniere. The company said it would pay an LNG-linked price for the gas, based on the Platts Japan Korea Marker (JKM), after deductions for fixed LNG shipping costs and a fixed liquefaction fee.

This comes after Cheniere said in February that it was stepping up efforts to expand its liquefaction capacity against the backdrop of a more favourable regulatory environment under US President Donald Trump. Cheniere’s CEO, Jack Fusco, said at the time that the company would pursue new permits aimed at expanding capacity at both its Sabine Pass and Corpus Christi sites on the US Gulf Coast. Earlier this month, in its first-quarter earnings release, Cheniere said the Corpus Christi Stage 3 expansion was 82.5% complete as of March 31. The company has plans to add two further midscale trains at Corpus Christi, with an FID targeted for this year. Meanwhile, FID on the SPL expansion is being targeted for 2026 or 2027 according to recent comments from Cheniere executives.

The company is targeting an eventual doubling of its liquefaction capacity to 90mn tpy. If it is successful, it will also need to underpin this growth with new feed gas supply agreements, and the deal with CNRL illustrates that efforts to secure these supplies are in the works.