Cheniere Energy, the largest US exporter of liquefied natural gas (LNG), signed a deal with PetroChina that lays that the groundwork for another expansion of Cheniere’s Texas export terminal as global demand for the fuel surges.
Under the sales and purchase agreement announced Wednesday, PetroChina has agreed to buy up to approximately 1.8 million tonnes per annum of LNG from Cheniere on a free-on-board basis. Deliveries under the SPA will begin in 2026, reach the full 1.8 mtpa in 2028, and continue through 2050.
The purchase price for LNG under the SPA is indexed to the Henry Hub price, plus a fixed liquefaction fee. Half of the total volume, or approximately 0.9 mtpa, is subject to Cheniere making a positive final investment decision (FID) to construct additional liquefaction capacity at the Corpus Christi LNG Terminal beyond the seven-train Corpus Christi Stage 3 Project.
“We are pleased to build upon our existing and successful long-term relationship with PetroChina and sign our first LNG contract that crosses over into the second half of this century,” said Jack Fusco, Cheniere’s President and Chief Executive Officer. “PetroChina is a leading energy company in one of the largest and fastest growing markets for LNG. This SPA increases Cheniere’s long-term sales to PetroChina to approximately 3 mtpa, and we are proud to support China’s progress toward a lower-carbon future with our reliable, cleaner burning LNG.”
Commenting on the agreement, Tian Jinghui, Executive Chairman of Petro China stated “natural gas continues to play a vital role in enabling energy transition in China. We are pleased to further expand our cooperation with Cheniere in delivering LNG, one of the cleanest fuel choices to our millions of customers for many years to come.”
Cheniere’s deal with PetroChina, which represents nearly two dozen cargoes per year, comes as Russia strangles gas supplies to Europe amid the war in Ukraine. Global shortages of the fuel ahead of the winter have sent LNG prices soaring as buyers in Europe and Asia vie for cargoes.