Cheniere Energy LNG Long Term Deal to Sell to China
Cheniere Energy announced Friday that it has struck two long-term deals to sell liquefied natural gas to China’s state-controlled oil and gas giant.
The Houston-based energy company will sell about 1.2 million tons of LNG a year to PetroChina International Co., a subsidiary of China National Petroleum Corporation, as part of two sale agreements that extend through 2043. Shipments will begin this year and ramp up in 2023.
In a statement, Cheniere president and CEO Jack Fusco called China “one of the largest and fastest growing LNG markets worldwide.” The country has recently accelerated a shift from coal to natural gas in an effort to address a air pollution crisis in many of its urban areas.
Cheniere is working to open its terminal at the Port of Corpus Christi, which will support the deals with China. The company has begun construction on two liquefaction facilities there, and it’s planning to build a third if it secures enough sale contracts.
So far, Cheniere is the only company to have shipped LNG from U.S. shale fields abroad, all from its LNG plant and terminal in Sabine Pass, Louisiana. The first tanker sailed last year. It’s now expanding that complex to support more production and exports.
https://www.mysanantonio.com/business/eagle-ford-energy/article/Che...
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Replies to This Discussion
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Permalink Reply by Hydrocarbonite on
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So Keith,, shouldn’t we see NG north of $4.. with increased exploration and production?
Sound economics to me!!
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Permalink Reply by Skip Peel - Mineral Consultant on -
I think this particular statement is of importance.
Cheniere is working to open its terminal at the Port of Corpus Christi, which will support the deals with China. The company has begun construction on two liquefaction facilities there, and it’s planning to build a third if it secures enough sale contracts.
Cheniere made the decision to move forward with development of the Corpus Christi export facility based on its proximity to the Eagle Ford Shale. Corpus will almost certainly also source natural gas from the Permian Basin. Although both are oil, or at least "oily", plays they produce a good bit of "associated" gas especially so when the price is crude is high enough to incentivize increased drilling. For the near term natural gas prices will remain range bound, and possibly decrease, because fast growing supply is out stripping the incremental increase in demand. Increased exploration and production pushes prices down, not up.
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Permalink Reply by Hydrocarbonite on
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China represents exponential increase on demand side,, our stored-supply isn’t infinite.. hope the China deal exercise economics 101..... Supply and Demand!
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Permalink Reply by Skip Peel - Mineral Consultant on
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More demand is good. In fact it is imperative to lessen the downward pressure on natural gas prices from the surge in production coming from oily basins.
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Permalink Reply by Keith Mauck (Site Publisher) on
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Yeah, as Skip states increased production is outpacing demand now. A lot of the increased gas is coming from Oil plays. How low would gas be if we weren't ramping up exporting? I shutter to think.
As you can see here, the EF and Permian have lots of new gas. The Permian just added 10 rigs, so that gas from new rigs number should rocket up in the near future.
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