(Yicai Global) Nov. 24 -- Chinese natural gas distributor Foran Energy Group will purchase 80 shiploads of liquified natural gas over the next 20 years from the US’ Cheniere Energy as China promotes the use of US natural gas as a new source of clean energy.

Foran will buy four shiploads of natural gas a year from Cheniere from Jan. 1, 2023 to Dec. 31, 2042, it said yesterday. In total, the contract involves 6.1 million tons of natural gas, equivalent to 320 million British thermal units. The deal will be signed with Houston-based Cheniere’s London subsidiary, it added.

The purchase price will be linked to the settlement price of the Henry Hub natural gas futures on the New York mercantile exchange, plus gas liquefaction fees and transport costs, the Foshan, southern Guangdong province-based firm said.

This is a significant extension from a previous agreement signed in November last year, that resulted from discussions during the third China International Import Expo in Shanghai. At the time, Foran agreed to buy 26 shiploads of Cheniere’s LNG over a five-year period.

As of September, Foran, which provides pipeline natural gas services to more than one million residential customers and over 4,400 commercial users, had purchased USD45.8 million of Cheniere’s natural gas. Foran sold 2.9 billion cubic meters of natural gas last year, according to its website.

China promised to increase its purchasing of US-produced LNG as part of a trade agreement penned between the two nations in January 2020. Before this, China had been buying most of its natural gas from Central Asian countries and Myanmar. Earlier this month, China Petroleum & Chemical Corporation also inked a 20-year pact with Virginia-based Venture Global LNG to buy four million tons of LNG per year.

Foran’s share price [SHE:002911] was trading up 0.88 percent at 1 p.m. China time today at CNY10.36 (USD1.62).

Editor: Kim Taylor