Cheniere Energy, the largest US liquefied natural gas exporter from plants at Sabine Pass in Louisiana and Corpus Christi in Texas, has signed a sale and purchase agreement with ENN Group, the leading non-state energy company in China with LNG and growing city-gas assets.
The ENN LNG marketing unit based in Singapore will purchases 900,000 tonnes per annum of LNG from Cheniere Marketing on a free-on-board basis for a term of 13 years beginning in July 2022.
The purchase price for the LNG is indexed to the US benchmark Henry Hub price, plus a fixed liquefaction fee.
Acting as guarantor of the agreement will be the natural gas units in the ENN Group, which owns the Zhoushan LNG import terminal in the Zhejiang Free Trade Zone in eastern China.
“We are pleased to announce this long-term LNG contract with ENN, a major player in China’s rapidly growing natural gas market, and we look forward to a successful, long-term relationship with ENN as a customer,” said Jack Fusco, Cheniere’s President and Chief Executive.
“This SPA underscores the strength of the global LNG market, particularly in China, and highlights Cheniere’s role as a leading global supplier,’ added Fusco.
The CEO noted that the deal further advanced Cheniere’s commercial momentum in anticipation of the final investment decision expected in 2022 on expanding the Corpus Christi facility.
Wang Yusuo, Chairman of ENN Natural Gas, was embarked on the cleaner energy path with industry reforms and structural adjustment of energy consumption.
“It is expected that the two parties will seize the opportunity of this cooperation to establish a strategic relationship, to provide clients with high quality resources and services,” said Wang.
ENN, whose shares are listed in Hong Kong, said in its latest earnings that first-half revenues had increased 30 percent to the equivalent of US$6.38Bln.
ENN now has a total of 239 city-gas franchises in 20 different regions and provinces in areas such as in Beijing, Fujian, Guangdong, Shanghai and Tianjin, with a connectable population of 117 million.
Since the start of 2021, ENN has acquired more exclusive operating rights in four more city-gas projects, the Ruyang Industrial area in Henan province, Lvsigang Town in Jiangsu province, the Lantang industrial new town in Guangdong province and the industrial area of Chizhou in Anhui province.