Chesapeake Energy (Chesapeake) has signed a long-term liquified natural gas (LNG) supply agreement with energy trading company Vitol.

Under the terms of the agreement, Chesapeake subsidiary Chesapeake Energy Marketing will supply up to one million tonnes per annum of LNG to Vitol.

Slated to start in 2028, the LNG supply deal has been signed for 15 years.

After the heads of agreement (HOA) is implemented, Chesapeake and Vitol will determine which US liquefaction facility would be best for liquefying Chesapeake Energy Marketing’s gas for transportation.

The LNG purchase price will be indexed to the Japan Korea Marker for the duration of the contract.

Chesapeake president and CEO Nick Dell’Osso said: “We are pleased to expand our relationship with Vitol to deliver independently certified reliable, affordable, lower-carbon energy to global markets in need.

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“Today’s announcement marks another important step on our path to ‘Be LNG Ready’, and is further recognition of the premium rock, returns and runway of our advantaged portfolio and the strength of our financial position. We look forward to entering into additional agreements as export capacity continues to come online.”

Vitol head of Americas Ben Marshall said: “The global energy landscape has changed significantly in the last two years, which has highlighted the importance of US natural gas production and liquefaction in satisfying the world’s energy needs.

“Global LNG demand is experiencing tremendous growth and Vitol continues to strengthen its position to safely and reliably deliver cost-effective, flexible solutions to our customers around the world.”

Separately, Chesapeake announced its third-quarter results for 2023.

The US-based company reported net income of $70m, a 92% decline in comparison with $883m in the third quarter of 2022.

For the quarter that ended 30 September 2023, Chesapeake’s net production was approximately 3.5 billion cubic feet equivalent per day.

During the period under review, revenues and other incomes declined by 52.1% to $1.51bn from $3.16bn in the same period a year ago.