Cheniere and Apache Gas Supply Agreement Indexed to Global LNG Prices

Cheniere Energy announced today it has entered into a long-term gas supply agreement with Apache Corporation. Under the agreement Apache has agreed to sell 140,000 MMBtu per day of natural gas to Corpus Christi Stage III for a term of approximately 15 years. The LNG associated with this gas supply, approximately 0.85 million tonnes per annum, will be marketed by Cheniere. Apache will receive an LNG price, net of a fixed liquefaction fee and certain costs incurred by Cheniere, for the natural gas delivered to Corpus Christi Stage III. The LNG price will be based on international LNG indices.

“This first-of-its-kind long-term agreement with Apache represents a commercial evolution in the U.S. LNG industry, as it will ensure the continued reliable delivery of natural gas to Cheniere from one of the premier producers in the Permian Basin, while enabling Apache to access global LNG pricing and receive flow assurance for its gas,” said Jack Fusco, Cheniere’s President and CEO. “This commercial agreement, which is expected to support the Corpus Christi Stage III project, reinforces Cheniere’s track record of creating innovative, collaborative solutions to meet customers’ needs and support Cheniere’s growth.”

The Corpus Christi Stage III project is being developed to include up to seven midscale liquefaction trains with a total expected nominal production capacity of approximately 9.5 mtpa. Corpus Christi Stage III received a positive environmental assessment from the U.S. Federal Energy Regulatory Commission in March 2019. The project is expected to receive all remaining necessary regulatory approvals for the project by the end of 2019.