The agreement with PetroChina is the first LNG supply deal for Cheniere that “crosses over into the second half of this century,” company President and CEO Jack Fusco said in the statement. (Source: Hart Energy, Shutterstock.com)
Affiliates of Cheniere Energy Inc. and PetroChina Co. Ltd. entered into a long-term LNG sale and purchase agreement for 1.8 million tonnes per annum (mtpa) of supply spanning 24 years.
The deal allows the U.S.-based company to provide vital supply to clients looking to secure LNG amid rising demand for the resource as the energy sector and global economies continue to transition away from oil and coal to low-carbon alternatives.
Per the agreement, PetroChina subsidiary PetroChina International Co. Ltd. will acquire up to 1.8 mtpa of LNG from Cheniere Marketing LLC, a wholly-owned subsidiary of Cheniere, on a free-on-board basis, Houston-based Cheniere revealed July 20 in a press statement.
“We are pleased to build upon our existing and successful long-term relationship with PetroChina and sign our first LNG contract that crosses over into the second half of this century.”—Jack Fusco, Cheniere Energy Inc.
The LNG agreement is the first one for Cheniere that “crosses over into the second half of this century,” company President and CEO Jack Fusco said in the statement.
LNG shipments are expected to commence in 2026 but not reach the full 1.8 mtpa capacity until 2028. The LNG shipments are slated to continue through 2050, while the purchase price of the LNG under the agreement is indexed to Henry Hub plus a fixed liquefaction fee.
“Half of the total volume, or approximately 0.9 mtpa, is subject to Cheniere making a positive final investment decision (FID) to construct additional liquefaction capacity at the Corpus Christi LNG Terminal beyond the seven-train Corpus Christi Stage 3 Project,” Cheniere said.
RELATED:
Cheniere Eying Further LNG Growth Following Corpus Christi Expansion FID
On June 22, Cheniere Energy’s board of directors announced an FID related to the Corpus Christi Stage 3 Liquefaction Project, which will have capacity to ship 10-plus mtpa from 7 midscale trains. The project is the second U.S. LNG export plant after the Venture Global LNG Plaquemines facility to reach an FID this year.
More projects in the United States are expected due to growing demand for U.S. natural gas and LNG exports as a viable source to solving the world’s energy security and decarbonization challenges.
“Natural gas continues to play a vital role in enabling energy transition in China,” PetroChina International Executive Chairman Tian Jinghui said in the July 20 statement as well.
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