Cheniere recently signed two big, long-term deals for the sale of LNG.
On Oct. 25, Cheniere Energy Inc. announced that its subsidiary, Cheniere Marketing LLC, had entered into a binding liquefied natural gas (LNG) sale and purchase agreement (SPA) with a subsidiary of Glencore.
Under the SPA, Glencore agreed to purchase approximately 0.8 million tonnes per annum of LNG from Cheniere Marketing on a free-on-board basis for a term of approximately 13 years beginning in April 2023. 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 SPA with Glencore, one of the world’s largest producers and marketers of commodities and a significant player in the global LNG market,” Cheniere President and CEO Jack Fusco said. “This agreement once again reinforces Cheniere’s position as a leading global LNG provider, and we look forward to a successful long-term relationship with Glencore.”
He continued by saying that this SPA further builds upon Cheniere’s commercial momentum, marking another important milestone in contracting their LNG capacity ahead of an expansion expected to begin next year.
That project is being developed to include up to seven midscale liquefaction trains with a total expected nominal production capacity of approximately 10 million tonnes per annum. Cheniere said they received all necessary regulatory approvals.
Earlier, Cheniere announced that Cheniere Marketing entered into a LNG SPA with ENN LNG (Singapore) Pte Ltd (ENN LNG), a wholly-owned subsidiary of ENN Natural Gas Co. Ltd.
Under that SPA, ENN LNG has agreed to purchase approximately 0.9 million tonnes per annum of LNG from Cheniere Marketing on a free-on-board basis for a term of approximately 13 years beginning in July 2022.
The purchase price for LNG under the SPA is indexed to the Henry Hub price, plus a fixed liquefaction fee. ENN Natural Gas is acting as guarantor of the SPA.
“We are pleased to announce this long-term LNG contract with ENN, a major player in China’s rapidly growing natural gas market, and we look forward to a successful, long-term relationship with ENN as a customer,” Fusco added. “This SPA underscores the strength of the global LNG market today, particularly in China, and highlights Cheniere’s role as a leading global LNG supplier, tailoring solutions to help meet the long-term energy needs and environmental goals of our customers.”
Chairman of the Board of ENN Natural Gas Wang Yusuo said, “China is making great efforts to achieve the goal of peak carbon emissions and carbon neutrality, boosting the reform of the natural gas market, and accelerating the structural adjustment of energy consumption.”
Yusuo also said that the two parties will seize the opportunity of this cooperation to establish a strategic relationship, to provide clients with high quality resources and services, and to make positive efforts to the realization of peak carbon emissions and carbon neutrality in China.