Cheniere Energy, Inc. (Cheniere) (NYSE American: LNG) announced on Friday (Nov05) that its subsidiary, Cheniere Marketing, LLC (Cheniere Marketing), has entered into a binding liquefied natural gas (LNG) sale and purchase agreement (SPA) with Sinochem Group Co., Ltd (Sinochem Group).
Under the SPA, Sinochem Group has agreed to purchase an initial volume of approximately 0.9 million tonnes per annum (“mtpa”) beginning in July 2022, which increases to 1.8 mtpa. The SPA has a term of approximately 17.5 years and Sinochem Group will purchase the LNG volumes on a free-on-board basis. The purchase price for LNG under the SPA is indexed to the Henry Hub price, 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, affordable and reliable energy to the Chinese market for many years to come,” said Jack Fusco, Cheniere’s President and Chief Executive Officer. “This SPA once again demonstrates Cheniere’s ability to tailor solutions in order to meet the needs of LNG consumers worldwide, which is enabled by the scale of our platform and the reliability of our operations. In addition, 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.”
The Corpus Christi Stage 3 project is being developed to include up to seven midscale liquefaction trains with a total expected nominal production capacity of over 10 mtpa. It has received all necessary regulatory approvals.