Cheniere Energy signs 20-year LNG supply deal with China's ENN

June 27, 2023
Cheniere Marketing will supply about 1.8 million tons per annum of LNG to ENN, starting mid-2026

Cheniere Energy subsidiary Cheniere Marketing has signed a second 20-year liquefied natural gas (LNG) sale and purchase agreement with Singapore’s unit of Chinese-based ENN Natural Gas.

Under the agreement, Cheniere Marketing will supply about 1.8 million tons per year (mtpa) of LNG, starting mid-2026 and increasing to 0.9 mtpa in 2027. The contract will be on a free-on-board basis for a purchase price indexed to the Henry Hub price with a fixed liquefaction fee.

The accomplishment of the delivery planned in 2027 is dependent on the initiation of commercial operations of the first new train of the Sabine Pass Liquefaction Expansion Project (SPL Expansion Project). The development of SPL Expansion Project will help deliver up to three natural gas liquefaction trains anticipated to produce about 20 mtpa of LNG.

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“This SPA 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,” said Jack Fusco, Cheniere’s President and Chief Executive Officer. “This SPA accelerates Cheniere’s commercial momentum on the SPL Expansion Project, demonstrating the market’s need for additional LNG capacity, and the value of Cheniere’s unique capability to tailor long-term solutions for customers worldwide.”

The U.S. now has seven LNG export facilities, including those owned by companies such as Cheniere, JERA, Sempra and Venture Global. This year, U.S. LNG exports are expected to average about 12.1 billion cubic feet per day, according to the federal Energy Information Administration, making the country tops among global LNG exporters.

Cheniere itself has signed export deals with partners across the world, including Norway’s Equinor, Korea Southern Power and now China’s ENN.

The record U.S. volumes of natural gas productions, from shale plays such as those in the Permian Basin, Marcellus and Bakken, are transported by pipeline to the U.S. Gulf Coast terminals. The gas is then liquified by chilling to temperatures such as minus 260 degrees Fahrenheit, increasing density and making the gas more stable for long-distance shipping.