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China National Offshore Oil Corporation (CNOOC), the largest Chinese importer of liquefied natural gas, has signed a deal with U.S. firm Venture Global LNG to buy LNG from a new export facility in Louisiana.
Under the deal announced on Monday, CNOOC Gas & Power Group Co., Ltd., a wholly-owned subsidiary of CNOOC, will buy 2 million tons per annum (MTPA) of LNG on a free on board (FOB) basis for 20 years from Venture Global’s Plaquemines LNG export facility in Plaquemines Parish, Louisiana.
The agreement is the first in which CNOOC, China’s largest importer of LNG, has agreed to buy the super-chilled fuel from a U.S. exporter, Venture Global LNG said.
The deal underscores Chinese importers’ increased interest in American LNG and is the latest such deal companies from the two countries have announced in recent weeks.
Last month, Venture Global LNG signed an agreement with China Petroleum & Chemical Corporation (Sinopec), which, the U.S. firm says, will be “the largest single LNG supply deal ever signed by a US company and will double imports of US LNG to China.” Sinopec will buy 4 million MTPA of LNG from Plaquemines LNG, and UNIPEC, a Sinopec subsidiary, has agreed to purchase 3.5 million tons of LNG from Venture Global’s Calcasieu Pass LNG facility.
Cheniere Energy also announced in November a binding long-term LNG sale and purchase agreement with Sinochem Group of China.
American exports to China started rising toward the end of last year to reach a record high in August 2021, the latest available EIA data shows.
In October 2021, China was the top destination of U.S. LNG exports, the U.S. Department of Energy’s LNG Monthly for December 2021 showed.
The United States will have the world’s largest LNG export capacity next year, exceeding the capacity of the top LNG exporters, Australia and Qatar, the Energy Information Administration (EIA) said earlier this month.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.