Cheniere And China’s ENN Energy Lock In 20-Year LNG Deal
Cheniere And China’s ENN Energy Lock In 20-Year LNG Deal | OilPrice.com
Cheniere And China’s ENN Energy Lock In 20-Year LNG Deal
Crude prices are locked in…
The volume of crude oil…
The United States largest producer of LNG, Cheniere Energy (NYSE:LNG), has signed a long-term liquefied natural gas (LNG) sale and purchase agreement with China’s ENN Energy Holdings.
ENN will purchase ~1.8M metric tons/year of LNG on a free-on-board basis at Henry Hub prices for a 20-year term, with deliveries to commence mid-2026 ramping up to 0.9 million tonne per annum (mtpa) in 2027.
The deal is subject to the completion of Cheniere’s Sabine Pass project, which is being developed to include up to three liquefaction trains with an expected total production capacity of ~20M tons/year of LNG.
Current;y, Sabine Pass has six fully operational liquefaction units aka ?“trains”, each capable of producing ~5 mtpa of LNG for an aggregate nominal production capacity of ~30 mtpa. Cheniere processes more than 4.7 billion cubic feet per day of natural gas into LNG. Sabine Pass has multiple pipeline connections to interstate and intrastate pipelines, and is located less than four nautical miles from the Gulf of Mexico thus providing easy access to seafaring vessels.
Last week, Cheinere entered another long-term liquefied natural gas sale and purchase agreement with Equinor ASA (NYSE:EQNR) that will see the Norwegian national oil company purchase 1.75M metric tons/year of LNG on a free-on-board basis for a purchase price indexed to the Henry Hub price, for a 15-year term.
Last year, ENN signed a 13-year deal with Cheniere to purchase 900K metric tons/year, again based on Henry Hub prices.
Henry Hub and European natural gas prices have jumped following turmoil in Russia’s political landscape over the past few days. Henry Hub natural gas was trading up 11.8% to $2.92/MMBtu, the highest level since early March after the Wagner mercenary group staged a short-lived revolt.
“While the immediate supply risks have disappeared, the market will likely have to start pricing in a larger risk premium for oil given the growing instability in Russia,” ING strategists Warren Patterson and Ewa Manthey said on Monday.
ADVERTISEMENT
By Alex Kimani for Oilprice.com
More Top Reads From Oilprice.com:
Join the discussion| Back to homepage
ADVERTISEMENT
Related Knowledge Center: Liquefied natural gas
Driven by plentiful natural gas produced from shale plays, the United States began exporting liquefied natural gas in 2016 when the Sabine Pass terminal in Louisiana opened and shipped its first cargo. Since then, additional capacity, or trains, have been added to Sabine Pass, and terminals have become operational in Cameron Parish, La.; Hackberry, La.; Cove Point, Md.; and Corpus Christi, Texas. The Energy Information Administration projects that U.S. LNG export capacity will reach 8.9 billion cubic feet per day (Bcf/d) by the end of 2019, making it the third largest in the world, behind Australia and Qatar. The tariff war with China has the potential to impact some final investment decisions for additional terminals in the coming months.