South Korea’s POSCO to buy LNG supplies from US LNG exporter Cheniere: company
An affiliate of South Korea’s POSCO has agreed to buy 400,000 mt/year of LNG from Cheniere Energy under a 20-year deal, the biggest US LNG exporter said May 25.
The volumes will be bought on a free-on-board basis starting in late 2026 from Cheniere’s marketing unit, which among other things handles the sale and delivery of spot cargoes to global customers.
The purchase price for LNG under the agreement will be indexed to the US Henry Hub price, plus a fixed liquefaction fee, Cheniere said in a statement. POSCO is South Korea’s largest steelmaker and owner of South Korea’s first private LNG terminal.
Cheniere said the deal will provide additional support for the 10 million mt/year mid-scale liquefaction expansion project it is developing at the site of its Corpus Christi Liquefaction facility in Texas. A final investment decision on the Stage 3 expansion is expected this summer. The deal is subject to Cheniere taking positive FID on the expansion project.
Previously, Cheniere announced long-term offtake deals covering 5.1 million mt/year of the Stage 3 expansion project’s maximum expected capacity. The project is expected online by the end of 2025. Optionality at Corpus Christi Liquefaction and Cheniere’s second export terminal, Sabine Pass Liquefaction in Louisiana, will allow Cheniere to cover some of the remaining capacity from other offtake commitments that Cheniere has secured.
Amid a surge in spot end-user prices since 2021, there has been a flurry of commercial activity in 2021 and during the first several months of 2022 tied to current and proposed US LNG export terminals, which offer fixed fees and destination flexibility.