QatarEnergy has agreed to purchase up to four million tonnes of liquefied natural gas annually from US exporter Cheniere Energy under two long-term contracts extending through 2054, adding American supplies to its international trading portfolio.The agreements, announced on 22 October, cover two million tonnes a year each from Cheniere’s Sabine Pass terminal in Louisiana and Corpus Christi facility in Texas. QatarEnergy expects deliveries to begin in 2031, while Cheniere describes the starting period more broadly as the early 2030s.
Both contracts provide for free-on-board deliveries, under which QatarEnergy takes responsibility for arranging transportation after cargoes are loaded at the US export terminals. The purchase price will be linked to the Henry Hub natural gas benchmark, with an additional fixed fee, Cheniere said.
One million tonnes of the annual volume contracted from Sabine Pass remains conditional on a positive final investment decision for the first phase of the terminal’s proposed expansion. Consequently, not all the contracted supply is unconditional at this stage.
The arrangements were signed by Saad Sherida Al-Kaabi, Qatar’s Minister of State for Energy Affairs and president and chief executive of QatarEnergy, and Jack Fusco, chairman, president and chief executive of Cheniere Energy.
Al-Kaabi said the purchases would diversify QatarEnergy’s worldwide LNG holdings and complement its existing supplies. He said the additional volumes would support the company’s trading activities and help it respond to customers with different delivery requirements.
For Cheniere, the contracts establish a substantial long-term sales commitment across its two operating export complexes. They also give QatarEnergy access to cargoes originating outside the Gulf, at a time when regional shipping and energy infrastructure have been affected by the conflict involving Iran.
The contracts follow disruption to Qatar’s own LNG operations after strikes on energy infrastructure at Ras Laffan earlier this year. Damage to production facilities has constrained export capacity and complicated the task of meeting commitments to overseas buyers. The new American contracts, however, are scheduled to start years after those disruptions and should not be treated as an immediate replacement for interrupted shipments.
QatarEnergy has also been exploring other potential long-term purchases from American suppliers. Discussions involving Venture Global concern at least three million tonnes annually, while separate negotiations with Woodside Energy involve possible supplies from its Louisiana LNG development. Neither potential arrangement has been announced as a completed contract.
Those discussions underline the distinction between QatarEnergy’s existing role as a producer and its growing activity as a purchaser and marketer of LNG sourced from third parties. Acquiring cargoes at overseas terminals can allow a trading company to supply customers from different locations without relying entirely on production at its domestic facilities.
The shipping provisions are important because free-on-board contracts give buyers control over the vessels used to transport LNG and the destinations to which cargoes are directed, subject to contractual conditions. That differs from delivered contracts, under which sellers typically arrange transportation to the receiving terminal.
Henry Hub indexation also ties the gas component of the purchase price to a widely used US market reference rather than directly to crude oil prices. The fixed fee forms another element of the agreed pricing structure. Neither company disclosed the total monetary value of the contracts. The pricing formula does not establish a single fixed purchase cost, because the underlying benchmark can fluctuate throughout the supply period as market conditions change.
Cheniere said the agreements would run until the end of 2054. QatarEnergy’s announcement identified 2031 as the anticipated commencement year, leaving the exact initial delivery schedule dependent on implementation of the contracts and, for part of the Sabine Pass volume, the relevant investment approval.
The purchases are divided between two Cheniere subsidiaries, Sabine Pass Liquefaction and Corpus Christi Liquefaction. Both facilities are located on the US Gulf Coast, providing established export infrastructure for LNG shipments to international markets.
QatarEnergy described the purchases as part of its effort to maintain a diversified portfolio of LNG supplies and trading arrangements. Its statement did not identify the eventual destination markets for the contracted American cargoes or provide a breakdown of planned deliveries by customer.
Cheniere likewise did not disclose the fixed fee or a precise timetable for the Sabine Pass expansion investment decision. The conditional volume represents half of the Sabine Pass agreement and one quarter of the combined annual quantity covered by the two contracts.
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