Cheniere Energy Inc. on Friday said it has scored two agreements to export natural gas to China National Petroleum Corp. (CNPC), the largest state-owned producer, which should help advance a planned terminal in South Texas.
The two liquefied natural gas (LNG) sale and purchase agreements (SPA) were secured with CNPC subsidiary PetroChina International Co. Ltd. for 1.2 million metric tons/year (mmty). A portion of supply is scheduled to begin shipping later this year, with the balance beginning in 2023.
The SPAs, signed with Cheniere subsidiaries Corpus Christi Liquefaction LLC and Cheniere Marketing International LLP, should “support the development of Corpus Christi Train 3, and we are now focused on completing the remaining necessary steps to reach a final investment decision later this year,” Cheniere CEO Jack Fusco said.
The South Texas terminal now is securing supply contracts to ensure its viability.
The term of each SPA continues through 2043, with the LNG purchase price indexed to the Henry Hub plus a fixed component. Financial terms were not disclosed. When the MOU was signed last fall, sources indicated it might be worth as much as $11 billion.
CNPC is “an important global energy player in one of the largest and fastest growing LNG markets worldwide,” Fusco said. “These long-term SPAs build upon the memorandum of understanding (MOU) we signed in November, and we look forward to a successful long-term partnership with CNPC.”
Houston-based Cheniere operates Sabine Pass LNG on the Louisiana coast, the only operating export facility in the Lower 48.
Last month Cheniere nabbed an SPA with Singapore-based trader Trafigura Pte Ltd. for about 1 mmty over 15 years beginning in 2019. The LNG purchase price, like the CNPC agreements, also is to be indexed to Henry Hub.
Projects under development by Cheniere include a fourth train at Sabine Pass. In December it also asked the Federal Energy Regulatory Commission for permission to install a third feed gas meter facility at the facility.