Chevron Negotiates 15-Year LNG Supply Deals With European Buyers

U.S. supermajor Chevron is in talks to supply LNG to Europe in deals of up to 15 years as European buyers have moved from spot and short-term supply to longer-term deliveries after the Russian invasion of Ukraine, a Chevron executive has told Reuters.

“European customers want medium-term deals in the up to 15 years space and we’re working on some commercial deals,” Colin Parfitt, head of Chevron’s trading, shipping and pipeline operations, told Reuters.

Before the Russian invasion of Ukraine and the halt of most Russian pipeline gas supply to many European countries, European customers largely preferred LNG supply deals of up to five years or to buy cargoes on the spot market, according to Parfitt.

Now that Europe is relying much more on LNG for its gas supply, the longer-term deals aren’t taboo anymore despite the EU’s net-zero targets and concerns about emissions in the LNG supply chain.

Chevron is expected to supply most of the LNG to Europe from U.S. export terminals.

Qatar, another major LNG exporter apart from the United States, last month signed agreements with three European majors to deliver LNG to Europe from its expansion projects expected to come online in 2026.

QatarEnergy and TotalEnergies signed two long-term LNG agreements under which Qatar will supply up to 3.5 million tons per year of LNG to France for 27 years beginning in 2026.

QatarEnergy also signed another 27-year agreement to ship LNG to Europe by agreeing to deliver cargoes for Eni in Italy beginning in 2026. Under the deal, QatarEnergy and the Italian major will deliver LNG to FSRU Italia, a floating storage and regasification unit located in the port of Piombino, in Italy’s Tuscany region.

Prior to the Eni deal, Qatar announced an agreement with Shell to deliver LNG to the Gate LNG terminal in the port of Rotterdam.

Source: Oilprice.com