LNG

China Gas Holdings, one of the leading non-state controlled companies in the Chinese city-gas and LNG sectors, said one of its subsidiaries signed a US LNG supply agreement with Venture Global for cargoes from Louisiana.

The Chinese company said its trading unit China Gas Hongda Energy Trading Co. signed two 20-year LNG Sales and Purchase Agreements (SPAs) for free-on-board (FOB) cargoes.

Under the deals, China Gas will buy 1 million tonnes per annum (MTPA) of LNG from the Plaquemines LNG project and another 1 MTPA from the CP2 LNG export facility to be constructed near Venture Global’s existing Calcasieu Pass export plant.

China Gas is involved in more than 600 projects in cities and towns with city-gas pipeline concessions, 17 natural gas pipeline transmission projects and operates over 550 LNG and compressed natural gas filling stations for vehicles.

“As a major participant in China’s energy market, we are committed to providing reliable and low-carbon LNG to Chinese customers,” said Liu Minghui, Chairman and President of China Gas.

Strengthens portfolio

“These two SPAs increase additional volumes for our LNG portfolio and strengthen China Gas’s supply ability,” stated Liu.

Michael Sabel, Chief Executive of Arlington, Virginia-based Venture Global said he was pleased to have the Chinese firm as a customer.

“Through relentless execution and innovation, our company will continue to bring much needed new capacity to the global LNG market, supporting energy security and environmental progress both in Asia and Europe,” declared Sabel.

China Gas has many subsidiaries and one of them was behind one the worst gas pipeline accidents in China in recent years and China Gas took full responsibility.

The explosion occurred in an area in Shiyan City in the northeast province of Hubei Province on the 13th of June 2021 and killed 25 people and left 27 others with serious injuries.

The pipeline system in Shiyan was the responsibility of one of the subsidiaries of China gas, Shiyan Dongfeng Zhongran City Gas Development Co.

However, China Gas accepted the blame and pledged to improve safety standards in the gas industry after an investigation by the provincial government exposed serious safety flaws.

The accident occurred when leaked natural gas from a pipeline gathered in the confined space underneath buildings and caused an explosion when coming into contact with sparks in fumes from nearby catering outlets.

The investigation into the incident exposed problems in the Chinese gas sector exacerbated by illegal construction, long-term failure to investigate gas leaks, chaotic property management and inefficient emergency responses to major incidents.

NextDecade Corp., the developer of the Rio Grande LNG export project on the Brownsville Ship Channel in Texas, has signed a 20-year sale and purchase agreement with ExxonMobil LNG Asia Pacific.

Under the SPA, the US major’s Asia unit will purchase 1 million metric tonnes per annum of LNG supplied from the first two Trains of the Rio Grande facility. The first Train expected to start commercial operations as early as 2026.

NextDecade mostly recently also signed a third supply agreement with a Chinese company since the start of 2022.

The Houston, Texas-based company signed a 20-year SPA with China Gas Hongda Energy Trading Co., a wholly-owned subsidiary of China Gas Holdings. This deal was also for 1 MTPA of LNG indexed to Henry Hub and delivered on a free-on-board (FOB) basis.

NextDecade in April 2022 signed a 20-year SPA with the Singapore trading arm of ENN Group of China and another with China’s Guangdong Energy Group Natural Gas.

“The signing of this long-term SPA with ExxonMobil, a global leader in the energy industry, represents another significant milestone for RGLNG and signifies the beginning of a mutually beneficial relationship,” said Matt Schatzman, NextDecade’s Chairman and Chief Executive.

Strategy

“This agreement highlights the success of NextDecade’s strategy to provide customers with low carbon-intensive LNG to help them meet their carbon reduction goals, while providing them access to secure energy supply,” added Schatzman.

The US company has ultimate plans and permits to produce up to 27 MTPA of LNG from five liquefaction Trains at the Rio Grande facility.

“LNG will play an increasingly important role in helping society reduce emissions during the energy transition,” said Peter Clarke, Senior Vice President of LNG for the ExxonMobil Upstream Company.

“We look forward to working with NextDecade to continue growing ExxonMobil’s LNG portfolio and delivering the lower-emissions energy the world needs,” added Clarke.

NextDecade has said that based on current expected demand for LNG and assuming the achievement of further LNG contracting and financing, the company anticipated making a positive final investment decision on up to three Trains in the second half of 2022, with FIDs of its remaining Trains to follow thereafter.