Cheniere Energy has agreed to sell around 1.8 million tonnes per annum (mtpa) of liquefied natural gas (LNG) to ENN LNG (Singapore), a fully-owned subsidiary of Chinese energy company ENN Natural Gas.

In this connection, Cheniere Energy’s subsidiary Cheniere Marketing has entered into a long-term 20-year LNG sale and purchase agreement (SPA) with the ENN Natural Gas’ subsidiary.

The SPA is anticipated to support Cheniere Energy’s Sabine Pass expansion project (SPL Expansion Project) on the US Gulf Coast.

As per the SPA, ENN LNG (Singapore) will buy the LNG on a free-on-board (FOB) basis, with the purchase price tied to the Henry Hub price, plus a fixed fee for liquefaction.

Cheniere Energy expects deliveries of the LNG to begin in mid-2026. The volumes will be ramped up to 0.9mtpa in 2027.

The remaining 0.9mtpa of LNG will be delivered based on certain factors such as a positive final investment decision taken for the first train, that is Train Seven, of the Sabine Pass expansion project. Delivery of these volumes will start after the start of commercial operations of Train Seven.

The term of the SPA will be valid until the 20th anniversary of the commencement of commercial operations of the particular LNG train.

Cheniere Energy president and CEO Jack Fusco said: “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.

“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 SPA is the second of its kind inked between Cheniere Marketing and ENN Natural Gas. A long-term SPA signed in October 2021 began the first cooperation between the parties in the LNG business.

ENN Natural Gas board chairman Wang, Yusuo 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.”

Currently, the Sabine Pass liquefaction project in Louisiana has six fully operational liquefaction units with a combined capacity of around 30mtpa of LNG. The expansion project, for which permitting process was initiated by the company in February 2023, will add nearly 20mtpa of LNG with three new trains.

Recently, Cheniere Energy signed an SPA with Equinor to sell around 1.75mtpa of LNG to the latter for a 15-year period. This SPA will also support the Sabine Pass expansion project.