Oct. 12—Houston liquefied natural gas company Cheniere Energy has agreed to sell LNG to ENN Natural Gas of China beginning July 2022 and for the next 13 years, the companies said Monday.
ENN LNG Pte Ltd., a subsidiary of ENN, will buy about 900,000 metric tons per year of LNG under the sales and purchase agreement. The deal comes as U.S. natural-gas futures on Oct. 5 hit $6.31 a million British thermal units, an increase of nearly 150 percent this year.
For Cheniere, the SPA underscores the strength of the global LNG market, particularly in China, and highlights the company's role as a global LNG supplier to help meet the long-term energy needs and environmental goals of its customers, according to Jack Fusco, Cheniere President and CEO.
"The SPA also further advances Cheniere's commercial momentum and marks another milestone in our efforts to contract our LNG capacity on a long-term basis in anticipation of an FID of Corpus Christi Stage 3, which we expect will occur next year," Fusco said in the release.
Meanwhile, a sixth train is under construction at Cheniere's Sabine Pass LNG terminal in Louisiana, which would boost production capacity at that facility to 30 million metric tons per year.
The Federal Energy Regulatory Commission last month approved Cheniere's Sept. 15 request to introduce feed gas to commission parts of Train 6 at Sabine Pass. Feed gas is processed natural gas from pipelines that will be turned into LNG.
Cheniere expects the sixth natural gas liquefaction unit at Sabine Pass to come online earlier than expected, in the first quarter of next year instead of the first half.
For ENN, Wang Yusuo, chairman of the board, said the SPA shows China's efforts toward achieving its goal of being net-zero by 2060.
"ENN is accelerating the usage of digital technology to build a modern energy system, and to promote intelligent upgrading of the natural gas industry," Yusuo said. "It is expected 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."
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