Cheniere inks long-term LNG supply deal with China’s Sinochem

US LNG exporter Cheniere has signed a binding long-term deal to supply liquefied natural gas to China’s Sinochem Group.

Under the sales and purchase deal, Cheniere’s marketing unit will supply about 0.9 million tonnes per annum of LNG to Sinochem on a free-on-board basis for a term of about 17.5 years beginning in July 2022.

Furthermore, Cheniere said in a statement on Friday this initial volume would increase to 1.8 mtpa, while the Henry Hub-linked LNG deal would include a fixed liquefaction fee.

This new contract follows deals Cheniere signed with Glencore but also a unit of Chinese independent gas distributor ENN.

Cheniere’s chief executive Jack Fusco welcomed the long-term contact with Sinochem Group, one of China’s leading state-owned energy companies.

“The SPA further reinforces our commercial momentum, and once again confirms the strength of the global LNG market and the global call for investment in additional LNG capacity, including our Corpus Christi Stage 3 project,” he said.

The Corpus Christi project would include up to seven mid-scale liquefaction trains with a total expected nominal production capacity of about 10 mtpa. Cheniere has still to take a final investment decision on the project.

Located in Texas, the Corpus Christi liquefaction plant currently consists of three operational trains with each having a capacity of about 5 mtpa.

China’s imports of US LNG will substantially increase over the coming years.

Besides Cheniere’s deals with ENN and this new deal, Venture Global LNG has recently also signed a giant LNG deal with Sinopec for more than 80 million tonnes over a period of 20 years.

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