Houston’s Cheniere Energy on Monday announced that it has agreed to sell liquefied natural gas to global oil trader Vitol, its latest long-term sales agreement as it ramps up exports from its facilities on the U.S. Gulf Coast.
As part of the flexible 15-year deal, Vitol, based in Switzerland, will purchase about 700,000 metric tons of LNG a year from Cheniere’s marketing arm. Shipments are expected to begin this year. Vitol, active in the LNG market since 2005, delivers LNG around the world and maintains gas storage facilities in six European countries.
“We believe that LNG has an important role to play in the future energy mix,” Vitol CEO Russell Hardy said in a statement.
The deal comes as Europe looks to import more natural gas to help shift its power generation away from coal. U.S. officials have recently called for domestic LNG producers to ramp up exports to the continent, long reliant on Russian natural gas transported via pipeline.
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Steven Winberg, assistant secretary of fossil energy, warned last week during a hearing before the Senate Energy and Natural Resources Committee that Europe was becoming more dependent on Russian natural gas during a tense period for U.S.-Russia relations. “That does not have to be the case,” he said. “Our nation is endowed with vast supplies of natural gas and production is growing rapidly.”
The U.S. is quickly becoming a global player in LNG as companies look to build export terminals amid a boom in natural gas production in West Texas, Appalachia and elsewhere. The Federal Energy Regulatory Commission has been pushing to expedite its reviews of projects planned for the Gulf Coast and the East Coast.
The agency earlier this month issued regulatory schedules for its environmental review of 12 LNG export facilities, including six in Texas. Among them were Freeport LNG’s project in Brazoria County, Sempra Energy’s Port Arthur project and NextDecade LNG’s project in Brownsville.
Cheniere in early 2016 became the first U.S. company to export LNG from its Sabine Pass terminal in Louisiana. The company, which now ships to at least 20 foreign markets, is expanding that terminal and building a second one in Corpus Christi.
Virginia’s Dominion Energy also began exporting LNG from a terminal in Maryland earlier this year.
Other U.S. companies are expected to begin exports next year, including two based in Houston. Freeport LNG is working to open its Gulf Coast terminal at Quintana Island, and Kinder Morgan is completing an export terminal in Georgia.
