Equinor signs 15-year LNG deal with Cheniere

(Bloomberg) – Norwegian energy company Equinor ASA is doubling down on its purchases of U.S. liquefied natural gas (LNG) with a new 15-year deal as the company looks to replace Russian gas supplies.

Equinor signed up for another 1.75 million tons a year in long-term supply from Cheniere Energy Inc., the biggest U.S. producer. The company agreed to buy a similar volume from Cheniere in an agreement struck a year ago.

Europe has turned to alternative nations like the U.S. after Moscow’s invasion of Ukraine last year, with a particular focus on LNG imports. Equinor, which is already supplying the region with pipeline gas and LNG from its plant in the north of Norway, has been seeking more deals that allow it to sell the gas on to European or Asian customers at a profit.

“Europe will need natural gas to ensure flexible energy on demand to support the build-out of more intermittent renewables, and LNG will play an important role,” said Helge Haugane, Equinor’s Senior Vice President for Gas and Power. “In other markets, for example in Asia, demand for LNG is expected to grow.”

Cheniere said in a statement that half the volume will start in 2027, while the remaining LNG will be delivered pending a final investment decision for the Sabine Pass expansion, which is due to start at the end of the decade. The project, which is currently being permitted, would add another 20 million tons a year to the existing Louisiana export plant.

Cheniere’s announcement with Equinor is the U.S. producer’s second term deal in 2023, following seven LNG deals that it made with international buyers in 2022 following the invasion of Ukraine.

Cheniere’s shares gained as much as 2.4%, to the highest since May 2.