US LNG exporting giant Cheniere has signed a new long-term deal to supply liquefied natural gas to a unit of Chinese independent gas distributor ENN.
Under the 20-plus year sales and purchase agreement, Cheniere Marketing will supply about 1.8 million tonnes per annum (mtpa) of LNG to ENN LNG (Singapore) on a free-on-board basis.
Cheniere said in a statement that the Henry Hub-indexed deal includes a fixed liquefaction fee.
Deliveries will start in mid-2026, ramping to 0.9 mtpa in 2027.
Moreover, the US firm said delivery of the remaining 0.9 mtpa, which is subject to, among other things, a positive final investment decision with respect to the first train of the Sabine Pass expansion project, will start upon the launch of commercial operations of Train Seven.
The term of the SPA extends until the 20th anniversary of the start of commercial operations of Train Seven, it said.
This is the second long-term SPA signed between ENN and Cheniere Marketing.
Also, the 13-year SPA signed in October 2021 for some 0.9 million tonnes per year of LNG initiated the first cooperation between two firms in the LNG business.
Sabine Pass expansion
This is also the second long-term LNG supply agreement for Cheniere in a week following the deal with Norway’s Equinor.
Both of these contracts include volumes from the proposed Sabine Pass Stage 5 expansion project.
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.
In February this year, Cheniere initiated the pre-filing review process with the US FERC for the proposed 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 two 220,000-cbm LNG storage tanks.
Cheniere’s president and CEO, Jack Fusco, said in the statement that this SPA “further supports China’s structural shift to natural gas as a growing primary energy source, powering its economy while enabling improved environmental performance.”
Also, this SPA “accelerates Cheniere’s commercial momentum on the SPL expansion project, demonstrating the market’s need for additional LNG capacity,” he said.