Chinese natural gas distribution company ENN Natural Gas Co. Ltd. said on Oct. 11 it signed a 13-year deal to buy LNG from Cheniere Energy Inc. beginning in July 2022.

This is the first major binding deal for natural gas between the two nations since a long-standing trade war which brought gas trade between both countries to a temporary standstill.

The deal is for 0.9 million tonnes per annum (mtpa) of LNG and was purchased on a free-on-board (FOB) basis, ENN said on Oct. 11.

Cheniere said the purchase price will be indexed to gas at the U.S. Henry Hub benchmark in Louisiana, plus a fixed liquefaction fee.

“The SPA (sale and purchase agreement) ... marks another milestone in our efforts to contract our LNG capacity on a long-term basis in anticipation of an FID (final investment decision) of Corpus Christi Stage 3, which we expect will occur next year,” Cheniere CEO Jack Fusco said in a release.

Cheniere is already the biggest buyer of gas in the United States and the biggest U.S. exporter of LNG with the capacity to produce about 40 mtpa of LNG—soon to be 45 mtpa once a sixth liquefaction train at its Sabine Pass plant in Louisiana enters service early next year.

The Stage 3 expansion at its Corpus Christi plant in Texas would add about 11.5 mtpa to the company’s LNG production capacity.

China's natural gas consumption is expected to reach 550 billion to 600 billion cubic meters by 2030, growing at an average annual growth rate of about 11% in 2020 and this year.

Last year, a unit of China’s Foran Gas Group Co Ltd signed a non-binding heads of agreement (HOA) deal with Cheniere for 26 LNG cargoes to be delivered over 2021-25.

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