US liquefied natural gas exporter Cheniere Energy has firmed up a deal to supply China’s Foran Energy with about 6 million tonnes over 20 years.

Cheniere has entered into a binding sale-and-purchase agreement (SPA) with Foran, following a heads of agreement the pair signed last November.

The US company confirmed the deal would see Foran buy about 300,000 tonnes of LNG per annum from Cheniere, on a delivered ex-ship basis — where the seller bears the risks and costs related to the delivery from the point of origin to the port specified by the buyer. Once the goods arrive at the port, the costs and risks are shifted to the buyer, including all customs duties and for the entire process of clearing the goods.

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The 20-year deal will begin in January 2023, with Cheniere confirming the price under the SPA was indexed to the Henry Hub price, plus a fee.

“This long-term LNG solution supports Foran’s goals and provides additional supply as China continues to seek cleaner, lower-carbon natural gas to meet its economic and environmental goals,” Cheniere chief executive Jack Fusco said.

“This SPA once again demonstrates the strength of the global LNG market today, particularly in China, and underscores the value of Cheniere’s leading ability to tailor solutions to help our customers advance their long-term energy and environmental priorities.”

Cheniere operates the Sabine Pass and Corpus Christi liquefaction facilities on the US Gulf Coast, which have an expected combined total production capacity of about 45 million tonnes per annum of LNG in operation or under construction.

The confirmation of the LNG supply deal with Foran came the same week it was revealed first LNG had been produced from Train 6 at Sabine Passin Cameron Parish, Louisiana.

Commissioning of the train is still continuing, but Cheniere expects substantial completion of Train 6 to be achieved by the first quarter of 2022, which will then take the company's number of liquefaction trains in operation to nine.