Houston’s Cheniere Energy, Inc. announced it has reached a long-term gas supply agreement with EOG Resources, Inc., another Houston firm that recently had 3 wells on a single pad in Grady County with production of more than 4,200 barrels of oil a day.
Cheniere’s susidiaries, Corpus Christi Liquefaction, LCC and Cheniere Corpus Christi Liquefaction Stage III, LLC entered into the agreements.
EOG has agreed to sell natural gas to Cheniere over a period of approximately 15 years beginning in early 2020, with the quantity starting at 140,000 MMBtu per day and increasing to 440,000 MMBtu per day.
The LNG associated with 140,000 MMBtu per day of this gas supply, or approximately 0.85 million tonnes per annum (“mtpa”), will be owned and marketed by Cheniere and EOG will receive a price based on the Platts Japan Korea Marker (JKM) for this gas. The remaining 300,000 MMBtu per day will be sold by EOG to Cheniere at a price indexed to Henry Hub.
Cheniere Energy is in the process of building a $1 billion natural gas pipeline in Oklahoma. It will transport natural gas out of the STACK play beginning in Kingfisher County. The new line will connect to existing pipelines near the Oklahoma-Texas state line.