Chesapeake strikes 15-year LNG deal with Gunvor

Chesapeake strikes 15-year LNG deal with Gunvor

Chesapeake Energy Corporation is to supply up to 2Mtpa of LNG to Gunvor with the purchase price indexed to Japan Korea Marker (JKM) for 15 years.

Following the execution of the Heads of Agreement, Chesapeake and Gunvor will jointly select the most optimal liquefaction facility in the US to liquify the gas produced by Chesapeake and deliver the LNG to Gunvor on a Free-on-Board (FOB) basis with a targeted start date in 2027.

Nick Dell’Osso, Chesapeake President and CEO, said, “This agreement reflects the powerful combination of the premium rock, returns, and runway of our competitively positioned Haynesville natural gas assets combined with the strength of our balance sheet and financial position to securely supply global LNG markets.

“We are pleased to partner with Gunvor, a leading global commodity and energy logistics company with a deep LNG track record, to deliver independently certified reliable, affordable, lower carbon energy to markets in need. Today marks an important initial step on our path to being LNG ready and we look forward to entering into additional agreements while export capacity continues to come online.”

Kalpesh Patel, Co-Head of LNG Trading and a member of the Executive Committee of Gunvor, which has been trading LNG since 2009, said, “We believe our trading expertise together with our robust shipping fleet will not only contribute to the competitive shipping costs, but also ensure reliable offtake operations for Chesapeake and the liquefaction facility which we will jointly select. We very much look forward to the long-term relationship with Chesapeake.”

Gunvor USA recently entered into a green hydrogen Letter of Intent with Fresno, California-based Yosemite Clean Energy, which is converting biomass to green hydrogen.

The Letter of Intent covers the purchase and marketing of all production of green hydrogen from Yosemite’s first three facilities located in Oroville, Tuolumne and Visalia, California. Each facility is projected to produce 7m kg per year of negative carbon intensity green hydrogen from 90,000 bone dry tonnes of biomass that are sustainably sourced from forest fuel hazard reduction projects, which reduce the threat of catastrophic wildfires in California.

Yosemite biofuels plants will help farmers by using end-of-life orchard biomass to eliminate open burning and the associated CO2 and air quality impacts within the Sacramento and San Joaquin Valleys. The first facility, located in Oroville, is expected to begin operations in the second half of 2025, while the remaining two facilities are projected to start over the two following years.

Last month Chesapeake executed an agreement to sell a portion of its remaining Eagle Ford asset to INEOS Energy for $1.4bn, in a transaction expected to close in Q2.

The company, whose net income totalled $3,513m in Q4 2022 with an adjusted EBITDAX of $1,032m, expanded its 2035 Net Zero goal to include both Scope 1 and Scope 2 GHG emissions, and lowered its previously attained interim 2025 GHG and methane intensity targets to 3.0Mt CO2e/boe and 0.02% respectively.

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