Chesapeake Inks Long-Term LNG Supply Agreement with Vitol
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Chesapeake Energy and Vitol have entered into a heads of agreement (HOA) with Chesapeake Energy Marketing, a subsidiary of Chesapeake Energy Corporation.
Under the HOA, Chesapeake will supply up to 1 million tonnes of LNG per annum to Vitol with the purchase price indexed to Japan Korea Marker (JKM) for a period of 15 years. Following the execution of the HOA, Chesapeake and Vitol will jointly select the most optimal liquefaction facility in the United States to liquify the gas produced by Chesapeake for delivery to Vitol. The HOA has a targeted start date in 2028.
“We are pleased to expand our relationship with Vitol to deliver independently certified reliable, affordable, lower carbon energy to global markets in need. Today’s announcement marks another important step on our path to ‘Be LNG Ready’, and is further recognition of the premium rock, returns, and runway of our advantaged portfolio and the strength of our financial position,” said Nick Dell’Osso, Chesapeake president and chief executive officer.
“We look forward to entering into additional agreements as export capacity continues to come online,” added Dell’Osso.
“We are excited to build upon our existing relationship with Chesapeake. The global energy landscape has changed significantly in the last two years, which has highlighted the importance of U.S. natural gas production and liquefaction in satisfying the world’s energy needs,” said Ben Marshall, head of Vitol Americas.
“Global LNG demand is experiencing tremendous growth and Vitol continues to strengthen its position to safely and reliably deliver cost effective, flexible solutions to our customers around the world,” added Marshall.
Headquartered in Oklahoma City, Chesapeake Energy Corporation is powered by dedicated and innovative employees who are focused on discovering and responsibly developing leading positions in top U.S. oil and gas plays. With a goal to achieve net zero GHG emissions (scope 1 and 2) by 2035, Chesapeake is committed to safely answering the call for affordable, reliable, lower carbon energy.
Vitol is a leader in the energy sector with a presence across the spectrum: from oil through to power, renewables, and carbon. Chartering circa 6,000 sea voyages every year, it trades 7.4 million barrels per day of crude oil and products, 13.7 million mt LNG per annum and has contracted sales of 1,500 TWh of natural gas each year. Vitol’s clients include national oil companies, multinationals, leading industrial companies and utilities. Founded in Rotterdam in 1966, today Vitol serves clients from some 40 offices worldwide and is invested in energy assets globally.
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