Long-term deal with China has been signed by a US LNG exporter

In the most recent contract between American and Chinese companies, Next Decade Corporation inked another long-term agreement for a U.S. exporter to supply liquefied natural gas (LNG) to China on Wednesday. ENN LNG (Singapore) Pte Ltd, a wholly-owned subsidiary of China’s ENN Natural Gas Co., Ltd, announced today a contract with Next Decade for the delivery of LNG from Next Decade’s Rio Grande LNG export project in Brownsville, Texas.

ENN LNG will acquire 1.5 million metric tonnes per year (MTPA) of LNG pegged to Henry Hub prices on a free-on-board basis under the 20-year sale and purchase deal. The LNG will be supplied by Rio Grande LNG’s first two trains, with the first train slated to begin commercial operations in 2026. “The commercial momentum at RGLNG is picking up, and we believe the firm is well positioned to profit from the growing LNG market,” said Matt Schatzman, chairman and CEO of Next Decade.

Next Decade expects to make a positive final investment decision (FID) on a minimum of two trains of the Rio Grande LNG export project in the second half of this year, with FIDs on the remaining three trains following shortly after, assuming further LNG contracting and finance. Last month, Next Decade agreed to provide Rio Grande LNG for 20 years to another Chinese company, Guangdong Energy Group Natural Gas Co. For its part, China’s ENN LNG inked two 20-year agreements with Energy Transfer last week for LNG shipments from the Lake Charles LNG project.

“We’re seeing good demand for long-term off take contracts for Lake Charles LNG, and we’re hopeful that we’ll be able to take a positive FID before the end of the year,” said Tom Mason, president of ET LNG. These agreements are the most recent in a string of long-term partnerships between American LNG developers and Chinese corporations.

Venture Global LNG inked an agreement with China Petroleum & Chemical Corporation (Sinopec) at the end of last year, which the business claims would be “the largest single LNG supply contract ever negotiated by a US company and will treble US LNG shipments to China.” Sinopec has contracted to buy 4 million MTPA of LNG from Plaquemines LNG, and 3.5 million tonnes of LNG from Venture Global’s Calcasieu Pass LNG project. In November, Cheniere Energy announced a contractual long-term LNG supply and purchase deal with China’s Sinochem Group.