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Delfin Midstream and Devon Energy enters LNG export partnership

06 Sep 2022

Delfin Midstream Inc (Delfin) and Devon Energy Corporation (Devon) on Monday (5 September) said they have entered into a liquefied natural gas (LNG) export partnership that includes an executed Heads of Agreement (HOA) for long-term liquefaction capacity and a pre-Financial Investment Decision (FID) strategic investment by Devon in Delfin.

The HOA provides the framework for finalising a definitive long-term tolling agreement representing 1.0 million tons per annum (MTPA) of liquefaction capacity in Delfin’s first Floating LNG vessel, with the ability to add an additional 1.0 MTPA in Delfin’s first or a future Floating LNG vessel.

In addition to providing Devon up to 2.0 MTPA of total liquefaction capacity on a long-term basis, the HOA also provides opportunity for additional future equity investments in Delfin by Devon. Devon’s 2022 guidance will remain unchanged.

“We are delighted to execute this agreement with Devon, representing a truly strategic partnership between a U.S. producer and a liquefaction provider,” said Dudley Poston, Delfin CEO. 

“We believe our unique liquefaction solution provides significant structural flexibility that allows producers to maximise the value of their natural gas, while providing a much-needed source of additional supply to the world LNG marketplace.”

“Our decision to invest in Delfin was the result of a thorough process intended to create additional pricing diversification for our natural gas portfolio and deliver a sustainable and capital efficient return for our shareholders,” said Rick Muncrief, Devon’s President and CEO. 

“Devon has a strong track record of finding best-in-class midstream and downstream solutions for our production and we are excited to partner with Delfin to meet the need for safe, clean and reliable energy.”

Following its recent announcement of a binding SPA with Vitol and a HOA with Centrica, this announcement represents Delfin’s third major agreement in the past two months. Delfin is also in numerous advanced discussions on additional binding SPAs, HOAs and tolling agreements similar to those previously announced.

As a modular project requiring only 2.0 to 2.5 MTPA of long-term contracts to begin construction, and with all necessary permits in hand, Delfin is on schedule to make FID on its first Floating LNG vessel by the end of this year.


Photo credit: Delfin Midstream
Published: 6 September 2022

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