Cheniere pens long-term LNG supply deal with Foran
Cheniere pens long-term LNG supply deal with Foran - Offshore Energy
Cheniere pens long-term LNG supply deal with Foran
U.S. Cheniere Energy’s subsidiary Cheniere Marketing has entered into a long-term liquefied natural gas (LNG) sale and purchase agreement (SPA) with China’s Foran Energy Group.
Under the SPA, Foran agreed to purchase approximately 0.9 million tons per annum (mtpa) of LNG for 20 years from Cheniere Marketing on a free-on-board (FOB) basis for a purchase price indexed to the Henry Hub price, plus a fixed liquefaction fee.
Cheniere said the deliveries will commence upon the start of commercial operations of the second train (train eight) of the Sabine Pass Liquefaction Expansion Project (SPL Expansion Project) in Louisiana, U.S., and are subject to, among other things, a positive final investment decision (FID) with respect to train eight.
Jack Fusco, Cheniere’s President and CEO, commented: “We are pleased to build upon our existing long-term relationship with Foran, one of the fastest growing natural gas companies in China, with the signing of our second 20-year SPA that secures increased LNG volumes for Foran for the long term.”
“This 20-year SPA further supports China’s commitment to growing natural gas as a primary energy source and provides Foran with a flexible and reliable LNG solution for its operations. The SPA is also expected to support the SPL Expansion Project, and represents the first contract signed in connection with the project’s second train.”
Cheniere and Foran signed their first 20-year LNG sale and purchase agreement (SPA) in 2021.
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To note, the SPL Expansion Project is being developed to include up to three natural gas liquefaction trains with an expected total production capacity of approximately 20 mtpa of LNG.
In 2023, Cheniere signed long-term LNG supply deals with multiple companies, including BASF and ENN.
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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.