The agreement will see ENN purchase approximately 1.8 million tonnes per annum (mtpa) of LNG from Cheniere Marketing on a free-on-board basis for a purchase price indexed to the Henry Hub price, plus a fixed liquefaction fee.
Cheniere said the deliveries will commence in mid-2026, ramping to 0.9 mtpa in 2027. Delivery of the remaining 0.9 mtpa, which is subject to, among other things, 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.
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 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 & carbon neutrality,’ further accelerating the energy transformation, and 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.”
“We are pleased to build upon our existing long-term relationship with ENN, a leader in China’s rapidly growing natural gas industry, with this 20-plus year agreement signed today,” added Jack Fusco, Cheniere’s President and Chief Executive Officer.
“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, and the value of Cheniere’s unique capability to tailor long-term solutions for customers worldwide.”
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 May 2023, certain subsidiaries of Cheniere Energy Partners entered the pre-filing review process with respect to the SPL Expansion Project with the Federal Energy Regulatory Commission (FERC) under the National Environmental Policy Act.
