Cheniere seals 20-year LNG supply deal with China’s Foran

US LNG exporting giant Cheniere has entered into a 20-year liquefied natural gas (LNG) supply deal with China’s Foran Energy.

Under the SPA, Foran has agreed to buy about 0.9 million tonnes per annum (mtpa) of LNG for 20 years from Cheniere Marketing on a free-on-board basis for a purchase price indexed to the Henry Hub price, plus a fixed liquefaction fee.

Cheniere said in a statement that deliveries would begin upon the start of commercial operations of the second train (train eight) of the Sabine Pass expansion project in Louisiana

The start of deliveries remains subject to, among other things, a positive final investment decision with respect to the Sabine Pass train.

Last week, Chinese gas firm Foran Energy announced it plans to buy LNG from Cheniere but the firm did not say when it expects to sign the 20-year SPA.

Back in 2021, Cheniere signed a binding 20-year LNG supply deal with Foran.

Under this deal, Foran has agreed to buy about 0.3 mtpa of LNG from Cheniere Marketing on a delivered ex-ship basis for a term of 20 years beginning in January 2023.

First contract for second Sabine Pass expansion train

“We are pleased to build upon our existing long-term relationship with Foran, one of the fastest growing natural gas companies in China, with the signing of our second 20-year SPA that secures increased LNG volumes for Foran for the long term,” Jack Fusco, Cheniere’s president and CEO, said.

“This 20-year SPA further supports China’s commitment to growing natural gas as a primary energy source and provides Foran with a flexible and reliable LNG solution for its operations,” he said.

Fusco added that the SPA is also expected to support the SPL expansion project, and represents the first contract signed in connection with the project’s second train.

Sabine Pass currently has a capacity of about 30 mtpa following the launch of the sixth train in February last year, while Cheniere’s three-train Corpus Christi plant in Texas can produce about 15 mtpa of LNG and is undergoing expansion.

Earlier this year, Cheniere initiated the pre-filing review process with the US FERC for the Sabine Pass Stage 5 expansion project.

The project will include up to three large-scale liquefaction trains, each with a production capacity of about 6.5 mtpa of LNG, a boil-off-gas (BOG) re-liquefaction unit with a production capacity of 0.75 mtpa of LNG, and also two 220,000-cbm LNG storage tanks.

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