Cheniere, Apache sign historic Permian shale LNG deal

By Luke Geiver | June 03, 2019

Cheniere Energy and Apache Corp. have signed a first-of-its-kind agreement on liquified natural gas. Through a newly announced, 15-year deal, Apache will produce and supply LNG to Cheniere Corpus Christi Liquefaction Stage III LLC, a subsidiary of Cheniere Energy Inc. The LNG price paid to Apache will be based on global LNG indices.

According to Cheniere, Apache has agreed to sell 140,000 MMBtu per day of natural gas to the Corpus Christi facility.

“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,” said Jack Fusco, president and CEO of the gas company, adding that the deal will give Apache flow assurance on its gas.

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 Federal Energy Regulatory Commission in March 2019 and is expected to receive all remaining necessary regulatory approvals for the project by the end of 2019.

Last week, Apache signed a deal with Altus Midstream to handle other portions of its shale gas.

John Christmann, Apache’s CEO and President, said the agreement was made to leverage Apache’s Permian Basin asset scale and diversify its customer base.

Cheniere has one of the largest liquefaction platforms in the world, consisting of the Sabine Pass and Corpus Christi liquefaction facilities on the U.S. Gulf Coast, with expected aggregate adjusted nominal production capacity of up to approximately 45 million tons per annum of LNG operating or under construction.