Cheniere (LNG) Inks LNG Sale-Purchase Agreement With Equinor
Cheniere Energy Inc.’s (LNG) subsidiary, Cheniere Marketing LLC, has signed a long-term liquefied natural gas (LNG) sale and purchase agreement (SPA) with Equinor ASA EQNR.
Per the terms of the SPA, Equinor will buy about 1.75 million tons per annum (mtpa) of LNG from Cheniere Marketing on a free-on-board basis for a purchase price that is linked to the Henry Hub price and a predetermined liquefaction fee.
The SPA has a 15-year term, beginning with the first delivery of the entire 1.75 mtpa of LNG.
According to Cheniere, the first U.S. company to receive regulatory approval to export LNG, the delivery of half the LNG volume mentioned in the SPA will begin in 2027. The delivery of the remaining half, which is expected to begin at the end of this decade, depends on a number of factors, including a favorable final investment decision regarding the first train of the Sabine Pass Liquefaction Expansion Project (SPL Expansion Project).
In a statement from Jack Fusco, president and chief executive officer of Cheniere, the SPA highlights the joint vision of Cheniere and Equinor for an energy future based on reliable, flexible and clean energy solutions.
He added that the agreement is expected to offer additional commercial support to the SPL Expansion Project. This project is being designed to incorporate up to three liquefaction trains for natural gas, with an estimated total LNG production capacity of about 20 mtpa.
Additionally, certain subsidiaries of Cheniere Energy Partners, L.P. began the pre-filing review process (pertaining to the SPL Expansion Project) with the Federal Energy Regulatory Commission in May 2023. They did so under the National Environmental Policy Act.
Zacks Rank & Key Picks
Cheniere currently carries a Zack Rank #3 (Hold).
A couple of better-ranked stocks for investors interested in the energy sector are Evolution Petroleum Corporation EPM and YPF Sociedad Anonima YPF. While Evolution Petroleum sports a Zacks Rank #1 (Strong Buy), YPF Sociedad Anonima carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Evolution Petroleum is an independent energy company. It was formed to acquire and develop oil and gas fields and apply both conventional and specialized technology to accelerate production, particularly in low-permeability reservoirs. EPM has witnessed an upward earnings estimate revision for 2023 and 2024 in the past 60 days.
YPF Sociedad Anonima is an international energy company, based on the integrated business of hydrocarbons. With its headquarters in Latin America, the company has high standards of efficiency, profitability and responsibility. YPF enjoys a dominant position in Argentina's exploration, production, refining and marketing sectors, as well as a growing presence in petrochemicals.
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