Cheniere, CNPC Sign MOU During Trump Visit

Cheniere Energy, the only current exporter of US LNG, signed a memorandum of understanding (MoU) November 10 with China National Petroleum Corporation (CNPC) covering “long term LNG purchase and sale co-operation.”

The MoU was signed by CNPC general manager Zhang Jianhua and Cheniere Energy CEO Jack Fusco in the presence of US president Donald Trump and Chinese president Xi Jinping.

Like many MoUs inked during state visits, the Cheniere-CNPC document contains no commercial underpinnings, but more a promise, according to a statement from the Chinese state petroleum producer, to “strengthen its co-operation with Cheniere Energy’s natural gas liquefaction project in the Gulf of Mexico and play a significant role in promoting the long-term co-operation of LNG procurement” between the US and China.

For its part, a Cheniere spokesman told NGW that under the MoU, Cheniere and CNPC “will continue in-depth discussions to strengthen co-operation on LNG export projects and the long-term LNG procurement co-operation between China and the US.”

Cheniere’s customers for LNG from Sabine Pass include Korea Gas Corporation (Kogas), Shell, Spain's Gas Natural, GAIL (India), Total and Centrica. All have 20-year sales and purchase agreements with different but fixed-price liquefaction fees and floating Henry Hub commodity price indexation.

Dale Lunan