November 15, 2021 [S&PGlobal] – Cheniere Energy reached a medium-term supply deal over the summer with French utility Engie tied to the US LNG exporter’s Corpus Christi Liquefaction terminal in Texas, according to a recently released letter to the US Department of Energy that was previously filed under seal.
Under the terms of the 11-year sale and purchase agreement, a range of approximately 0.4-1.2 million mt/year of LNG is to be delivered to Engie free on board from the Cheniere terminal.
The transaction, between Cheniere’s marketing unit and Engie, was reached June 23, according to the letter, dated July 23. The terms of the contract, beyond its length, volume and delivery basis, were not disclosed in the letter. The contract was to begin in 2021, though the letter did not say exactly when. Cheniere did not publicly announce the transaction at the time it was reached. A spokesperson declined to comment Nov. 11 when reached by phone.
Cheniere also operates an export facility at Sabine Pass in Louisiana. It expects to sanction in 2022 construction of an up to 10 million mt/year midscale liquefaction expansion at the site of its Texas facility.
Fixed-price term commercial activity among several US LNG exporters and developers — most notably Cheniere and Venture Global LNG — has picked up in recent months, amid high spot LNG prices in destination markets in Europe and Asia.
Cheniere has also signed supply deals this year with Canada’s Tourmaline, a subsidiary of Swiss commodity trader Glencore, China’s Sinochem and an affiliate of China’s ENN Natural Gas. Each of those deals was announced by Cheniere at the time it was reached.
In 2015, Cheniere announced that its marketing unit had signed a five-year deal with Engie for the delivery of LNG cargoes on an ex-ship basis primarily to the Montoir de Bretagne LNG regasification terminal in France. That SPA covered the delivery of up to 12 cargoes per year from 2018 to 2023, with the volumes linked to Northern European indexes.
In November 2020, Engie said it had halted talks with NextDecade about a supply deal tied to NextDecade’s proposed Rio Grande LNG export facility in South Texas, amid pressure that European utilities face from environmental interests to refrain from signing new long-term deals for importing US shale gas.
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