Page 6 - NorthAmOil Week 46 2021

NorthAmOil COMMENTARY NorthAmOil

Details disclosed of Cheniere’s LNG

supply deal with France’s Engie

US LNG producer Cheniere Energy is reported to have struck a deal to supply the fuel to

France’s Engie earlier this year

US-FRANCE LEADING US LNG producer Cheniere Energy momentum as the company tries to contract
struck a deal to supply the super-chilled fuel to more of its LNG capacity ahead of the FID on
WHAT: France’s Engie earlier this year, according to a Corpus Christi Stage 3.
Cheniere is reported letter to the US Department of Energy (DoE) The deals illustrate how appetite to strike
to have reached a deal whose details have now been made public. new long-term offtake deals is growing against
earlier this year to sell Under the newly disclosed deal, which was a backdrop of energy shortages. On the one
LNG to Engie. reached on June 23 according to the letter to the hand, buyers are cautious not to overcommit
DoE, Cheniere will supply 0.4-1.2mn tonnes in case demand drops off again, and the annual
WHY: per year (tpy) of LNG to Engie over an 11-year volumes involved in Cheniere’s deals – and a
The deal comes after period starting this year. The volumes will come number of those struck by other LNG compa-
Engie reportedly from Cheniere’s Corpus Christi LNG terminal nies recently – are comparatively small. On the
abandoned talks with in Texas, where Cheniere is planning to add new other, these buyers are keen to avoid being left
NextDecade last year liquefaction capacity through its Stage 3 expan- overly exposed to the spot market, which has
amid pressure to oppose sion, with a final investment decision (FID) been particularly volatile over the past year.
the use of shale gas as scheduled for next year.
feedstock for LNG. Cheniere did not disclose the deal at the time Changing priorities
that it was reached, and has not commented on The Cheniere-Engie deal is also notable because
WHAT NEXT: the matter since it became public. However, the last year the French company pulled out of talks
Cheniere is moving closer deal was followed by a number of others, which over a potential supply deal with a different US
to sanctioning additional were publicly disclosed by the LNG producer. LNG player, NextDecade, which is proposing to
liquefaction capacity, In recent weeks, Cheniere has reached supply build a new liquefaction terminal in South Texas.
while NextDecade is being agreements with commodity trader Glencore Engie was reported to have come under pressure
held up by legal and and Chinese firms ENN Natural Gas and Sin- from the French government not to buy LNG
regulatory challenges. ochem. All of those deals have been portrayed produced from shale gas. Hydraulic fracturing,
by Cheniere as evidence of its commercial a technique used to produce oil and gas from

P6 www. NEWSBASE .com Week 46 18•November•2021