The deal is one of several announced in recent weeks as LNG buyers seek to lock in long-term supplies and prices of the super-cooled fuel as global energy shortages boost prices to record highs.
Utilities around the world are competing for LNG cargoes to fill dangerously low gas stockpiles in Europe ahead of the winter heating season and meet insatiable demand for the fuel in Asia where coal and gas shortages have already caused power blackouts in China.
Under the sale and purchase agreement (SPA), Cheniere said Glencore, an Anglo-Swiss commodity trading and mining firm, agreed to purchase approximately 0.8 million tonnes per annum (MTPA) of LNG from Cheniere Marketing on a free-on-board basis for about 13 years beginning in April 2023.
The purchase price of the LNG will be indexed to prices at the U.S. Henry Hub gas benchmark in Louisiana, plus a fixed liquefaction fee, Cheniere said.
“This SPA further builds upon Cheniere’s commercial momentum, marking another important milestone in contracting our LNG capacity ahead of an FID (final investment decision) of Corpus Christi Stage 3, which we expect to occur next year,” Cheniere CEO Jack Fusco said in a release.
Cheniere’s Corpus Christi Stage 3 would add up to seven mid-scale liquefaction trains that would produce around 10 MTPA of LNG.