Cheniere Energy Shares Up Increase Volume and Extend Term of Long-Term Integrated Production Marketing Transaction with EOG
Feb 24, 2022 By MarketDepth
Cheniere Energy, Inc. (NYSE: LNG) is up more than 8% after the energy infrastructure company announced that its subsidiary, Cheniere Corpus Christi Liquefaction Stage III, LLC (“CCL Stage III”), has amended the long-term Integrated Production Marketing (“IPM”) gas supply agreement signed in 2019 with EOG Resources, Inc. (“EOG”) (NYSE: EOG), extending the term and tripling the volume of LNG associated with the natural gas supply under this long-term IPM transaction.
Contract for 15 Years
Under the amended IPM transaction, EOG has agreed to sell 420,000 MMBtu of natural gas per day to CCL Stage III for a period of 15 years, with one-third of the supply targeted to commence upon the completion of each of Trains 1, 4 and 5 of the Corpus Christi Stage III project.
“We are pleased to build upon the mutually beneficial long-term agreements we signed in 2019 with EOG, one of the largest independent natural gas producers in the United States. The extension and increase of our original IPM transaction further leverage our infrastructure platform, capabilities, and operations in Corpus Christi. This transaction is expected to provide the remaining commercial support needed to move forward with Corpus Christi Stage III, and we are focused on completing the outstanding steps required in order to reach FID this year.”
Jack Fusco, Cheniere’s President and Chief Executive Officer
In addition, the previously executed gas supply agreement, under which EOG will sell 300,000 MMBtu per day to CCL Stage III at a price indexed to Henry Hub, has been extended to 15 years. As a result, EOG will supply a total of 720,000 MMBtu of natural gas per day to CCL Stage III under the amended agreements for a 15-year period expected to commence upon start-up of the Corpus Christi Stage III project.
