UPDATE 2-Cheniere signs 25-year LNG sales deal with Taiwan's CPC
Cheniere said it will sell 2 million tonnes of LNG per year on a delivered basis to the state-owned oil and gas company, starting in 2021. It said the purchase price will be pegged to the Henry Hub monthly average, plus a fee.
"Most importantly, it helps to further achieve the diversification of LNG sources and stability of energy supply into the Taiwan market that are among CPC's key objectives," CPC Chairman Tai Chein said in a statement on Saturday.
CPC has already been importing substantial volumes from Qatar and Australia.
The contract is a significant boost to Taiwan's trade relations with the United States, particularly given the Trump administration's focus on trade with Asia, the source said.
The United States has become a major LNG exporter in the last two years, mostly due to the ramp-up of Cheniere's Sabine Pass terminal in Louisiana. The Houston-based company is also building the Corpus Christi terminal in Texas.
The CPC deal, which is through Cheniere's marketing arm, is not tied to a particular project or liquefaction train.
Cheniere said the agreement ties up a portion of its portfolio volume on a long-term basis with an investment grade counterparty. The company also retains the ability to use those volumes to support a future train or expansion project.
Cheniere announced in May that it was moving ahead with a third liquefaction train at its Corpus Christi project. It is currently marketing its sixth train at Sabine Pass, with an investment decision expected next year.
Taiwan is the world's fifth biggest importer of LNG, shipping in almost 16.8 million tonnes in 2017, according to the International Gas Union, giving the island a global import market share of almost 6 percent.
The deal comes just a day before Taiwan President Tsai Ing-wen embarks on an overseas trip to visit diplomatic allies via transit stops in the United States, which will be in Los Angeles and Houston, where many Taiwan businesspeople work in the energy sector.
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)