US company to supply LNG to China for 20 years

Venture Global LNG has signed a 20-year deal to sell liquid natural gas (LNG) to a unit of China National Offshore Oil Corp (CNOOC), Report informs referring to Reuters.

US-based Venture Global said it will supply 2 million tons of LNG per year from its Plaquemines LNG export facility in Louisiana to CNOOC Gas & Power Group Co Ltd. The US government granted Venture Global permission to start early site work on Plaquemines earlier this year.

"China is critical to global climate efforts, and LNG supplied by Venture Global will serve as an important addition to their low carbon energy mix for decades," said Mike Sabel, chief executive of Venture Global.

China is set to become the world's largest importer of LNG in 2022, and CNOOC is the country's largest buyer of the super-cooled fuel.

Liquefied natural gas is viewed by many countries as a transition fuel away from heavier-polluting coal plants, particularly in China, the world's biggest user of coal.

Global LNG demand has hit record highs each year since 2015, due mostly to surging demand in China and the rest of Asia. World LNG demand is expected to rise to 53.3 billion cubic feet per day (bcfd) next year, according to Goldman Sachs analysts.

CNOOC also will buy 1.5 million tons of LNG from Venture Global's Calcasieu Pass facility for a short-term.

"As China's largest LNG importer, CNOOC is committed deeply not only to the mission of securing China's gas supply, but also to the climate goals of building a carbon-neutral China by 2060," said Shi Chenggang, chairman of CNOOC Gas & Power.

Utilities worldwide have been using gas to keep power prices lower and maintain reliable electric grids while meeting rising energy demand.