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Cheniere LNG supply deal calls for 800,000 mt/year to be delivered to Glencore

Highlights

13-year agreement begins in April 2023

Purchase price indexed to Henry Hub, plus fee

A subsidiary of Swiss commodity trader Glencore will buy 800,000 mt/year of LNG from Cheniere Energy's marketing unit under a 13-year agreement announced Oct. 25.

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LNG under the agreement will be delivered on a free-on-board basis, beginning in April 2023. The purchase price will be indexed to the US Henry Hub, plus a liquefaction fee that Cheniere did not disclose in a statement about the transaction.

Commodity traders and end-users, particularly in China, have gobbled up US LNG under new medium- and long-term deals in recent months amid extremely volatile global gas prices that remain high, though down from records set earlier in October. On Oct. 11, Cheniere said a subsidiary of China's ENN Natural Gas had signed a 13-year deal to buy 900,000 mt/year of LNG, starting in July 2022, from the biggest US LNG exporter.

For Cheniere, the latest supply agreements come as it prepares to advance a proposed mid-scale liquefaction expansion project at its Texas terminal. It has said it expects to advance its 10 million mt/year Corpus Christi Stage 3 project in 2022, once remaining investment and commercial parameters are met. Cheniere has 15-year supply agreements tied to the expansion with US gas producers Apache and EOG Resources and Canadian oil and gas producer Tourmaline that cover a combined total of 2.55 million mt/year.

Elsewhere in the market for US LNG, earlier in October it was disclosed that a trading arm of China's Sinopec had agreed to a short-term deal to buy 1 million mt/year of LNG from Venture Global LNG's Calcasieu Pass liquefaction terminal that is under construction in southwest Louisiana, and that Sinopec had signed two 20-year deals with Venture Global -- one for 2.8 million mt/year of supply and the other for 1.2 million mt/year of supply – that are tied to Venture Global's proposed Plaquemines LNG facility that is to be built south of New Orleans.