Venture Global, an independent liquified natural gas (LNG) producer in the US, signed its first long-term sales agreement with China’s National Offshore Oil Corp. (CNOOC). The deal involved 3,5 million metric tons a year (mmty) of compressed and super-chilled fuel for 20 years.
Firstly, as we reported previously, Venture Global announced the deal back in November. In fact, it secured deals with both CNOOC and China Petroleum & Chemical Corp.; aka Sinopec, to sell nearly 8 mmty of LNG under long-term contracts. The sales represented the largest agreement ever signed with China by a US natural gas exporter.
Moreover, according to NGI, China was the second leading destination for US LNG exports between January and October, receiving 108.5 American cargoes. South Korea received the most, importing 110.5 US cargoes.
On the other hand, under the contract with CNOOC, Venture Global will supply China with 2 mmty of LNG; on a free-on-board basis from its planned Plaquemines export terminal. It would supply another 1.5 mmty from the Calcasieu Pass facility. Both of these facilities are in Louisiana.
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Venture Global secured relevant deals for the global market
In addition, the 10 mmty Calcasieu terminal is under the commissioning process. At the same time, the Plaquemines project, started early construction activities last month and still has not the approval for operations.
On the other hand, the deals between Venture Global and China were truly important, as it marked the first time CNOOC signed sales and purchase agreements with a US LNG exporter. The deals also came when natural gas shortages in China were causing severe drawbacks in heavy industries in the Asian country and as the European region struggled with high prices.
Furthermore, The US represented an excellent opportunity for securing relatively low-cost LNG, as prices spiked to all-time high records during the second half of the year. This advantage secured US exporters around 17 long-term deals in 2021 alone. Eight of those deals were closed with Chinese buyers.
Finally, Venture Global CEO Mike Sabel said. “China is critical to global climate efforts, and LNG supplied by Venture Global will serve as an important addition to their low-carbon energy mix for decades. This new long-term partnership with CNOOC builds on our company’s continued momentum in a very active 2021.”
