US liquified natural gas (LNG) supplier Cheniere Energy has agreed a deal with Chinese natural gas company ENN for the long-term sale and purchase of LNG.
The 20-plus year agreement will see Cheniere sell 1.8 million tonnes per annum (mtpa) to ENN at a price fixed to the Henry Hub natural gas spot price. The spot price currently sits at $2.15 per million British thermal units. Supply will commence in mid-2026.
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It is the second long-term LNG agreement between the two companies, with a first 13-year, 0.9mtpa supply deal signed in 2021. Both deals are fixed to the Henry Hub spot price and were signed on a free-on-board basis, meaning ENN takes all liability for the cargo from the moment it is shipped.
“We are pleased to build upon our existing long-term relationship with ENN, a leader in China’s rapidly growing natural gas industry,” said Jack Fusco, Cheniere’s president and CEO, of the two companies’ continued collaboration. “This SPA [sale and purchase agreement] 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 LNG.
The agreement is the latest in a string of LNG deals for Cheniere. Last week it agreed a similar long-term sale and purchase agreement with Norwegian energy company Equinor for 1.75mtpa over 15 years. In May too it agreed to supply 0.4mtpa to Korean Southern Power over 19 years.
In each case, Cheniere has stated that the deal is in aid of its SPL Expansion Project. This seeks to extend the company’s six-train, 30mtpa Sabine Pass liquefaction project with an adjacent facility. Once complete, the expansion will add a productive capacity of around 20mtpa, taking the Sabine Pass project to approximately 50mtpa of capacity.
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