Cheniere Energy, the largest US liquefied natural gas exporter with plants in Louisiana and Texas, has signed a binding LNG sale and purchase agreement with China’s Sinochem Group, the state-owned producer of fertiliser products and agrochemicals.
Under the deal, Sinochem has agreed to purchase an initial volume of around 900,000 tonnes per annum beginning in July 2022 and which then increases to 1.8 million tonnes per annum.
The SPA has a term of 17-and-a-half years and Sinochem will purchase the LNG volumes on a free-on-board basis whereby the Chinese company supplies its own shipping.
Cheniere said the purchase price was indexed to the Henry Hub natural gas benchmark plus a fixed liquefaction fee.
“We are pleased to announce this long-term LNG contract with Sinochem Group, one of China’s leading state-owned energy companies, and to further Cheniere’s role in providing clean energy to the Chinese market for many years to come,” said Jack Fusco, Cheniere’s President and Chief Executive.
“This SPA once again demonstrates Cheniere’s ability to tailor solutions to meet the needs of LNG consumers worldwide, which is enabled by the scale of our platform and the reliability of our operations,” stated Fusco.
Cheniere recently executed two other long-term sale and purchase agreements with ENN Group of China and UK-listed global commodities firm Glencore.
The new agreement 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.
