File photo of Cheniere Energy’s assets in the U.S. (Source: Shutterstock.com)
A Cheniere Energy Inc. affiliate signed a 20-year agreement to deliver 1.8 million tonnes per annum (mtpa) of LNG to a subsidiary of China’s ENN Natural Gas Co. Ltd., according to a June 26 press release.
The sale and purchase agreement, or SPA, is the second long-term agreement signed between Cheniere Marketing LLC and China’s ENN LNG. An initial SPA was signed in October 2021 by the companies, Cheniere said in a June 26 press release.
“This SPA further supports China’s structural shift to natural gas as a growing primary energy source, powering its economy while enabling improved environmental performance with flexible, reliable and cleaner liquefied natural gas,” Cheniere President and CEO Jack Fusco said in the release.
Under the SPA, ENN LNG subsidiary ENN LNG (Singapore) Pte. Ltd. will acquire the LNG from Cheniere Marketing on a free-on-board basis. The purchase price will be indexed to the Henry Hub benchmark and include a fixed liquefaction fee. Initial cargo deliveries are slated to start in mid-2026, ramping to 0.9 mtpa in 2027, Cheniere said.
Delivery of the remaining 0.9 mtpa is dependent on a final investment decision for the first train—the seventh train related to the Sabine Pass Liquefaction (SPL) Expansion Project—and will commence upon the start of commercial operations of train seven.
Terms associated with the SPA extend until the 20th anniversary of the start of commercial operations of train seven, Cheniere said.
Cheniere’s Sabine Pass expansion
Cheniere owns the Sabine Pass LNG terminal, home to six liquefaction trains with a total production capacity of 30 mtpa. The Sabine Pass expansion adds up to three liquefaction trains with a total production capacity of 20 mtpa or about 6.5 mtpa per train.
In May 2023, Cheniere entered the pre-filing review process for the SPL expansion with the U.S. Federal Energy Regulatory Commission under the National Environmental Policy Act.
Cheniere intends for the SPL expansion to be in-service by the end of the decade, according to a May 2 company investor presentation on its website.
“At present, China is moving forward with the implementation of ‘carbon peaking & carbon neutrality,’ further accelerating the energy transformation, and China’s natural gas market is full of potential,” ENN Natural Gas Chairman Wang Yusuo said in the release.
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