CPC Corp., Taiwan's state-owned producer of oil, natural gas and gasoline, announced Monday that it has reached a preliminary deal to purchase liquefied natural gas (LNG) from Cheniere Energy Inc. under a 25-year sale and purchase agreement (SPA).
According to CPC, a heads of agreement, a nonbinding precursor to a SPA, was signed on June 20 in Washington, DC. Under the HOA, CPC agreed to purchase 2 million metric tons/year from Cheniere. Government officials from Taiwan and the United States were present for the signing.
"This agreement will strengthen CPC's cooperation with Cheniere, with regards to its development of LNG liquefaction and export projects in North America," CPC said in a translated statement. "This 25-year agreement symbolizes not just the beginning of a long-term collaboration between Cheniere and CPC, but also provides a crucial step to further strengthen the trade relationship between the U.S. and Taiwan...
"CPC and Cheniere will continue negotiations toward an LNG SPA over the coming period."
Cheniere began exporting LNG in February 2016 from its Sabine Pass terminal in Cameron Parish, LA. The company is planning two additional export projects on the Texas coast, Freeport LNG and Corpus Christi LNG.
Freeport LNG is expected to begin commercial operations in the second half of 2019 or early 2020. Meanwhile, in early June Cheniere filed a request with the Federal Energy Regulatory Commission for authorization to introduce fuel gas to commission Train 1 at its Corpus Christi Liquefaction (CCL) Project in South Texas.
Cheniere also last month issued a final investment decision to build a third train at CCL. The first two trains are scheduled to begin service in 2019; an LNG train takes about four years to build.