LNG

Cheniere Energy of the US has signed its second LNG supply agreement with a leading Chinese company in November 2021 with a binding 20-year deal with Foran Energy Group, a leading city-gas provider in the southern Guangdong province.

The US Department of Energy has revealed that US liquefied natural gas exporter Cheniere Energy has signed a firm medium-term supply deal with French utility Engie from volumes produced at the Corpus Christi plant in Texas.

The DoE outlined the agreement as lasting for 11 year and amounting to between 400,000 tonnes and 1.2 million tonnes per annum on a free-on-board (FOB) basis whereby the French company pays for the shipping.

Analysts say the secrecy could be because the French government under President Emmanuel Macron had resolved to curb imports of LNG produced from hydraulic fracturing for shale gas.

Cheniere had previously announced away back in 2015 that its unit, Cheniere LNG Marketing, had signed a five-year deal with Engie for the delivery of LNG cargoes to the Montoir-de-Bretagne facility on the Atlantic Coast of France.

Cheniere also signed a deal in early November 2021 to supply cargoes to China’s Sinochem Group, the state-owned producer of fertiliser products and agrochemicals.

Under that deal, Sinochem agreed to purchase an initial volume of around 900,000 tonnes per annum beginning in July 2022 and which then increases to 1.8 MTPA.

The SPA has a term of 17-and-a-half years and Sinochem will purchase the LNG volumes like Engie on a FOB basis.

Cheniere said the Sinochem purchase price was indexed to the Henry Hub natural gas benchmark plus a fixed liquefaction fee.

Cheniere also recently executed two other long-term sale and purchase agreements with ENN Group of China and UK-listed global commodities firm Glencore.

The new agreements coincide with Cheniere's planned expansion with a new sixth Train coming on stream at Sabine Pass in Louisiana and a final investment decision coming up for a mid-sized production project at the Corpus Christi plant in Texas.

Cheniere will start commercial operations on Train 6 in the first quarter of 2022, about a year ahead of the guaranteed completion schedule.

Cheniere produces a nameplate 22.5 MTPA from the Sabine Pass facility in Louisiana and with Train 6 in operation output will jump to 27 MTPA.

The Corpus Christi plant will expand with seven mid-scale liquefaction Trains adjacent to the existing facility and adding almost 10 MTPA to the 13.5 MTPA from the three larger Trains, each producing 4.5 MTPA.