US-based natural gas company Cheniere Energy has agreed to a deal to sell liquefied natural gas (LNG) to a unit of Chinese oil and gas company PetroChina until 2050.
Under the long-term sale and purchase agreement (SPA), Cheniere’s wholly-owned subsidiary Cheniere Marketing will sell up to approximately 1.8 million tonnes per annum (Mtpa) of LNG on a free-on-board basis to PetroChina subsidiary PetroChina International Company (PCI).
Cheniere said that the LNG purchase price is indexed to the Henry Hub price, plus a fixed liquefaction fee.
The firm plans to start LNG deliveries to the Chinese firm in 2026 and reach the full 1.8Mtpa in 2028.
Cheniere president and CEO Jack Fusco said: “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.
“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 three million tonnes per annum, and we are proud to support China’s progress toward a lower-carbon future with our reliable, cleaner burning LNG.”
Despite this, approximately 0.9Mtpa of the total agreed volume under the SPA is subject to Cheniere making a positive final investment decision to build additional liquefaction capacity at the Corpus Christi LNG Terminal.
This would be in addition to the recently approved $8bn Corpus Christi Stage 3 Project, which will add up to seven midscale trains to increase the facility’s total nominal capacity to approximately 25Mtpa. This was approved by Cheniere and also signalled further expansions.
PCI executive chairman Tian Jinghui said: “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.”