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 an air pollution crisis in many of its urban areas.
Cheniere has been exporting natural gas since 2016 through its Sabine Pass facility in Louisiana. It’s now expanding that complex to support more production and exports.
It’s also working to open a 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.
“We expect these agreements to support the development of Corpus Christi Train 3, and we are now focused on completing the remaining necessary steps to reach a final investment decision later this year,” Fusco said.
U.S. Department of Energy said last month that the nation could become a net exporter of natural gas this year for the first time since 1957 as a result of the so-called shale boom that has unlocked vast reserve of natural gas in West Texas. The U.S. now ships LNG to at least 20 foreign markets.
Freeport LNG and Kinder Morgan are scheduled to begin exporting liquefied natural gas later this year. Several other companies, including Sempra Energy, are working on projects expected to start up in the coming years.