Cheniere Energy has reached a 22-year deal to supply liquefied natural gas (LNG) to Petrobras, Brazil's major energy company. This agreement adds another long-term client as Cheniere aims to grow its LNG export business along the Gulf Coast.
According to the sale and purchase agreement, Petrobras will buy about 800,000 tonnes of LNG annually from Cheniere Marketing on a free-on-board (FOB) basis.
Cheniere did not reveal when the deliveries will start or the pricing details for this contract.
The FOB arrangement means that Petrobras will manage the ocean transportation after the LNG is loaded, giving them flexibility in selecting destination ports for the shipments.
“We are excited to sign this long-term agreement with Petrobras, one of the biggest energy firms globally,” said Jack Fusco, Cheniere’s chairman, president, and CEO.
Fusco mentioned that this agreement offers Cheniere more commercial stability and clearer cash flow as the company looks into expanding its liquefaction operations.
“We are eager to provide dependable LNG to Petrobras for many years under this new agreement,” he added.
This deal comes as Cheniere is actively expanding its large LNG export facilities.
Based in Houston, Cheniere runs the Sabine Pass LNG terminal in Louisiana and the Corpus Christi LNG facility in Texas, which together produce about 56 million tonnes of LNG each year. The company is also working on adding approximately 5 million tonnes per year of capacity through various construction projects.
The Petrobras agreement follows the successful completion of Cheniere’s Stage 3 expansion at the Corpus Christi facility.
As reported in August, Cheniere finished the final Stage 3 liquefaction train on August 28, boosting its total LNG production capacity by over 20%.
Additionally, the company celebrated its 5,000th LNG cargo shortly after, when the LNG carrier Yari departed from Sabine Pass to Asia. This milestone came just over ten years after the company shipped its first LNG cargo from Sabine Pass in 2016.
Cheniere has indicated it will continue exploring opportunities to grow its liquefaction capacity at Gulf Coast facilities. The Petrobras contract marks another long-term commitment as the company plans its next growth phase.