Page 6 - NorthAmOil Week 29 2021

NorthAmOil COMMENTARY NorthAmOil

Cheniere’s expansion plan

boosted by Tourmaline deal

Cheniere Energy’s supply deal with Tourmaline Oil takes the LNG

producer a step closer to sanctioning its Corpus Christi Stage III

expansion project

NORTH AMERICA LEADING US LNG exporter Cheniere Energy Basin and British Columbia’s Montney shale
announced last week that it had struck a 15-year play – which is perhaps surprising given the
WHAT: supply deal with Tourmaline Oil, the largest variety of gas supply options available closer
Cheniere and Tourmaline producer of natural gas in Canada. The deal is to Corpus Christi LNG. However, Cheniere
has signed a 15-year gas aimed at supporting a proposed expansion of sources its feedstock gas from numerous loca-
supply deal. Cheniere’s Corpus Christi LNG export terminal tions and has frequently talked up the variety of
in Texas. It is also notable for the considerable supply options available to it. Tourmaline said
WHY: distance involved between the upstream opera- it had secured long-term firm transportation
The deal is aimed at tions and the liquefaction terminal. with TC Energy on existing pipeline systems for
supporting Cheniere’s At the same time, though, the deal illustrates moving the gas to Texas, for total tolls of $0.86
proposed expansion of that LNG giant Cheniere continues to move for- per mmBtu ($23.79 per 1,000 cubic metres).
its Corpus Christi LNG ward with its expansion plans. It may perhaps Cheniere said it would pay Tourmaline an
terminal. also suggest that a lack of LNG exports from LNG-linked price for its gas, based on the Platts
Canada’s West Coast is making the country’s Japan Korea Marker (JKM), after deductions for
WHAT NEXT: producers look elsewhere for buyers of their fixed LNG shipping costs and a fixed liquefac-
The deal brings an FID output – despite a new LNG terminal being tion fee. Tourmaline said the deal would effec-
closer, but Cheniere has proposed in Canada this week. tively cover one LNG cargo per month.
previously indicated that Cheniere has struck similar gas supply
it will prioritise marketing Deal details agreements at prices linked to JKM with EOG
its existing output. Under the deal, Tourmaline will supply Cheniere Resources and Apache – both of which produce
with 140,000mn British thermal units (3.9mn gas in locations that are far closer to the com-
cubic metres) per day of gas to Corpus Christi pany’s liquefaction terminals. This marks a shift
LNG from 2023. This will be converted to away from Cheniere’s previous gas supply agree-
roughly 850,000 tonnes per year (tpy) of LNG, ments, which have tended to be linked to the US’
and will be marketed by Cheniere. Henry Hub benchmark.
The gas will be supplied from Alberta’s Deep “This latest IPM [integrated production

Tourmaline said it had
secured long-term firm
transportation with
TC Energy on existing
pipeline systems for
moving the gas to
Texas.

P6 www. NEWSBASE .com Week 29 22•July•2021