Cheniere inks US LNG supply deal with Sinochem
US energy company Cheniere Energy said November 5 that it signed a sale and purchase agreement with China’s state-owned Sinochem to secure US LNG.
Sinochem under the terms of the sale and purchase agreement (SPA) signed up for an initial volume of 900,000 metric tons/year of LNG starting in July 2022. That volume could eventually increase to 1.8mn mt/yr under a 17.5-year term agreement.
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Prices will be fixed to Henry Hub, the US benchmark for the price of natural gas, plus an unspecified fixed liquefaction fee.
Cheniere CEO Jack Fusco said the agreement made a case for his company’s long-term trajectory.
“The SPA further reinforces our commercial momentum, and once again confirms the strength of the global LNG market and the global call for investment in additional LNG capacity, including our Corpus Christi Stage 3 project,” he said.
An expansion project at the Texas export facility envisions the addition of up to seven midscale trains with a production capacity of more than 10mn mt/yr. Cheniere has all of the necessary regulatory approvals to move forward.
Cheniere posted total revenues for the three months ending September 30 of $3.2bn, a 119% increase over the same period last year. Total cargoes of natural gas shipped out in liquid form reached 141 during the period, a substantial improvement over the year-earlier level of 55.
The company added that another liquefaction train at its Sabine Pass export terminal in Louisiana could be completed by the first quarter of 2022, a year ahead of the original schedule.