(Reuters) - U.S. liquefied natural gas (LNG) company Cheniere Energy Inc agreed to sell LNG to a unit of French energy company Engie SA for 11 years starting in 2021.
Analysts said the deal, which is with Cheniere's Corpus Christi LNG export project in Texas, should move the company's proposed Corpus Christi Stage 3 expansion closer to approval.
The deal announced in a recent filing with the Department of Energy is one of several announced in recent weeks as LNG buyers seek to lock in long-term prices and supplies of the super-cooled fuel as global energy shortages have boosted prices to record highs.
Utilities around the world are competing for LNG cargoes to fill extremely low gas stockpiles in Europe ahead of the winter heating season and meet insatiable demand for the fuel in Asia where coal and gas shortages have already caused power blackouts in China.
Under the sale and purchase agreement (SPA), Cheniere said Engie will buy about 0.4-1.2 million tonnes per annum (MTPA) of LNG.
Over the past couple of months, Cheniere has signed agreements to sell LNG to units of Anglo-Swiss mining and commodities trading firm Glencore (LON:GLEN) PLC, Chinese gas distribution company ENN Natural Gas Co Ltd and Chinese chemical and fertilizer producer Sinochem.
Cheniere has said those agreements moved it closer to making a final investment decision on the Stage 3 expansion, which is expected in 2022.
Stage 3 would add up to seven mid-scale liquefaction trains that would produce around 10 MTPA of LNG.
Cheniere is already the biggest buyer of gas in the United States and the biggest U.S. exporter of LNG with the capacity to produce about 40 MTPA of LNG - soon to be 45 MTPA once a sixth liquefaction train at its Sabine Pass plant in Louisiana enters service early next year.