Cheniere Energy, Inc. announced that Cheniere’s subsidiary, Cheniere Marketing, LLC, has entered into a long-term LNG SPA, expected to be a 20+ year deal to support the Sabine Pass Expansion Project.
Under the SPA, ENN has agreed to purchase approximately 1.8 million tpy of LNG from Cheniere Marketing on an FOB basis for a purchase price indexed to the Henry Hub price, as well as a fixed liquefaction fee. Deliveries will commence in mid-2026, ramping to 0.9 million tpy in 2027. Delivery of the remaining 0.9 million tpy, which is subject to a positive Final Investment Decision (FID) with respect to the first train (Train Seven) of the Sabine Pass Liquefaction Expansion Project (SPL Expansion Project), will commence upon the start of commercial operations of Train Seven. The term of the SPA extends until the 20th anniversary of the start of commercial operations of Train Seven.
Jack Fusco, Cheniere’s President, said: “This SPA further supports China’s structural shift to natural gas as a growing primary energy source, powering its economy while enabling improved environmental performance with flexible, reliable and cleaner LNG. This SPA accelerates Cheniere’s commercial momentum on the SPL Expansion Project, demonstrating the market’s need for additional LNG capacity”.
This is the second long-term SPA signed between ENN and Cheniere Marketing. The long-term SPA signed in October 2021 initiated the first cooperation between the two parties in the LNG business.
Wang Yusuo, Chairman of the Board of ENN Natural Gas said: “At present, China is moving forward with the implementation of carbon peaking and carbon neutrality, further accelerating the energy transformation. China’s natural gas market is full of potential. As a leading global LNG supplier, Cheniere’s stable LNG production and supply capacity are highly compatible with China’s fast-growing natural gas market. The signing of this long-term SPA marks another milestone in the establishment of good strategic cooperation between two parties, contributes to ENN Natural Gas’ establishment of an intelligent ecological operator in the field, provides customers with quality services and resources, and promotes the low-carbon transformation and upgrade of all industries.”
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 million tpy of LNG.