The American Cheniere and the Chinese ENN conclude a very long-term contract for liquefied gas
The leading producer of LNG, liquefied natural gas, in the United States, Cheniere Energy, has signed a long-term or very long-term gas sale and purchase agreement with China's ENN Energy Holdings.
ENN will purchase approximately 1.8 million metric tons per year of LNG on a free-on-board basis at Henry Hub prices over a 20-year period, with deliveries commencing in mid-2026 and ramping up to 0.9 million tons per year (mtpa) in 2027.
The agreement is conditional on the completion of Cheniere's Sabine Pass project, which is being developed to include up to three liquefaction trains with an expected total production capacity of approximately 20 million tonnes/year of LNG.
Currently, Sabine Pass has six fully operational liquefaction units, called "trains", each capable of producing ~5 mtpa of LNG for a total nominal production capacity of ~30 mtpa. Cheniere converts over 4.7 billion cubic feet per day of natural gas into LNG. Sabine Pass has multiple interstate and intrastate pipeline connections and is located less than four nautical miles from the Gulf of Mexico, providing easy access for marine vessels.
Last week, Cheinere entered into another long-term liquefied natural gas sale and purchase agreement with Equinor ASA, which will see the Norwegian national oil company purchase 1.75 million metric tons per year of LNG on a free-on basis -board for a purchase price indexed to the Henry Hub price, for a period of 15 years.
Last year, ENN signed a 13-year deal with Cheniere to purchase 900,000 metric tons annually, also based on the Henry Hub price.
Henry Hub and European natural gas prices rallied following the turmoil in Russia's political landscape in recent days. Henry Hub natural gas traded up 11.8% to $2.92/MMBtu, the highest level since early March after mercenary group Wagner staged a short-lived uprising. Furthermore, the Henry Hub price is becoming the real world reference for gas prices, putting the Dutch TTF, the European price, in the background or third place.
“Although the immediate risks to supply have disappeared, the market will likely have to start pricing in a higher risk premium for oil due to growing instability in Russia,” ING strategists Warren Patterson and Ewa Manthey said on Monday.
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The article The American Cheniere and the Chinese ENN conclude a very long-term contract for liquefied gas comes from Scenari Economici .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/lamericana-cheniere-e-la-cinese-enn-concludono-un-contratto-a-lunghissimo-termine-per-il-gas-liquefatto/ on Tue, 27 Jun 2023 10:00:18 +0000.