Cheniere in 15-year LNG supply deal with Vitol

For illustration purposes only (Image courtesy of Cheniere)

US LNG export player Cheniere Energy has entered into a long-term liquefied natural gas (LNG) supply deal with Swiss-based energy trading company Vitol.

Under the sales and purchase deal, Vitol has agreed to buy about 0.7 million tonnes per annum of LNG from Cheniere Marketing, a unit of Cheniere, on a free on board basis for a term of about 15 years beginning in 2018.

The LNG price will be indexed to the monthly Henry Hub price, plus a fee, Cheniere said in a statement on Monday.

Cheniere owns and operates the Sabine Pass LNG export facility in Louisiana, one of only two facilities currently exporting US shale gas-sourced LNG.

The company is also developing its second LNG export project at Corpus Christi in Texas.

Jack Fusco, Cheniere’s head said in the statement the company was “pleased” to announce this long-term deal with Vitol, one of the fastest growing players in the global LNG market

“This agreement continues Cheniere’s commercial momentum and supports our growth plans, while demonstrating the value LNG buyers place on Cheniere’s unique ability to offer flexible solutions tailored to the needs of LNG customers worldwide,” Fusco said.

Russell Hardy, chief executive of Vitol said the trading company believes that “LNG has an important role to play in the future energy mix and that its evolution will require a more flexible and tradeable LNG market.”