Energy Transfer has signed a liquefied natural gas (LNG) sale and purchase agreement (SPA) with China Gas Holdings (China Gas) subsidiary China Gas Hongda Energy Trading, pertaining to the Lake Charles LNG project in the US.

As per the SPA terms, Energy Transfer LNG will supply 700,000 tonnes of liquefied natural gas annually to China Gas on a free-on-board basis for a period of 25 years.

The purchase price is indexed to the Henry Hub benchmark, in addition to a fixed liquefaction charge.

Energy Transfer said the first LNG deliveries from the project are expected to commence in 2026.

The company noted that the SPAs will become subject to the satisfaction of the conditions, including the final investment decision (FID) by Energy Transfer LNG.

China Gas Hongda Energy Trading general manager Yalong Qi said: “This LNG SPA signed with Energy Transfer LNG, which is the first long-term contract of China Gas, strengthens our existing portfolio for the import of LNG, and will further enable China Gas to reliably and securely meet our natural gas customers’ needs.

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“It is also an important step along the path to realising China’s carbon peaking and carbon neutrality goals.”

Energy Transfer LNG president Tom Mason said: “China Gas is a premier natural gas distribution company in China, and we are pleased to enter into this 25-year LNG offtake agreement with them.”

The latest SPA brings the firm’s total LNG contracted from the Lake Charles LNG facility to nearly six million tonnes per annum. This also marks an important step towards the company’s aim of reaching FID later in 2022, Mason noted.

Planned to be built on the existing brownfield regasification facility, the Lake Charles LNG export facility will capitalise on four existing LNG storage tanks, two deep water berths, and other LNG infrastructure.

Last month, Energy Transfer signed an 18-year deal to supply LNG from the Lake Charles LNG export facility to South Korea’s SK Gas Trading.