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Cheniere Energy Inks 15-Year LNG Deal With Canadian Natural

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Cheniere Energy, Inc. (LNG - Free Report) recently announced that in order to secure future liquefied natural gas (“LNG”) volumes, it has entered into a long-term Integrated Production Marketing (“IPM”) agreement with Canadian Natural Resources Limited (CNQ - Free Report) . The deal, made through Cheniere Marketing, LLC, underscores a deepening partnership between upstream gas producers and global LNG marketers.

Insight Into the Agreement

Under the IPM agreement, a subsidiary of CNQ will supply 140,000 million British Thermal Units of natural gas per day to Cheniere Marketing over a 15-year term, starting in 2030. CNQ will serve as the guarantor for the agreement. The resulting LNG, amounting to approximately 0.85 million tons per annum (mtpa), will be marketed by Cheniere Marketing. Cheniere, currently carrying a Zacks Rank #3 (Hold), will pay a price linked to the Platts Japan Korea Marker, net of fixed shipping and liquefaction costs, ensuring pricing transparency and market alignment. This IPM agreement is contingent upon a positive Final Investment Decision (“FID”) for Cheniere’s Sabine Pass Liquefaction Expansion Project (SPL Expansion Project).

Overview of LNG’s SPL Expansion Project

The company, through its partners, is developing an expansion adjacent to the SPL Project, known as the SPL Expansion Project, with an anticipated production capacity of up to approximately 20 mtpa of LNG, including potential debottlenecking opportunities. By securing feed gas supply through long-term contracts, Cheniere is positioning itself to meet growing demand in Asia’s LNG markets and enhance the commercial viability of expansion plans.

In February 2024, certain subsidiaries of Cheniere Partners submitted applications to the Federal Energy Regulatory Commission for site approval to construct and operate the SPL Expansion Project. Additionally, these subsidiaries applied to the Department of Energy (“DOE”) for authorization to export LNG to both Free Trade Agreement (“FTA”) and non-FTA countries, excluding debottlenecking activities. In October 2024, the DOE granted authorization to export LNG to FTA countries. The development of this expansion project requires regulatory approvals and acceptable commercial and financing arrangements before the company makes a positive FID. Therefore, this deal with Canadian Natural Resources will serve as a base to secure a positive FID.

Key Picks

Investors interested in the energy sector might look at some better-ranked stocks like Flotek Industries, Inc. (FTK - Free Report) and Epsilon Energy Ltd. (EPSN - Free Report) . Flotek Industries and Epsilon Energy currently sport a Zacks Rank #1 (Strong Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

Flotek Industries develops and delivers prescriptive chemistry-based technology, including specialty chemicals, to clients in the energy, consumer industrials and food & beverage industries. The Zacks Consensus Estimate for FTK’s 2025 earnings indicates 55.88% year-over-year growth.

Houston, TX-based Epsilon Energy is an on-shore focused oil and natural gas company that is engaged in the acquisition, development, gathering and production of oil and gas reserves. The Zacks Consensus Estimate for EPSN’s 2025 earnings indicates 200% year-over-year growth.

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