China's state-owned oil & gas giant Sinopec signed a contract on November 4 with the U.S. Venture Global LNG to buy 4 million tonnes of liquefied natural gas (LNG) annually for 20 years, the largest long-term LNG deal ever signed between the two countries.
The annual supply of 4 million tonnes of LNG is equivalent to meeting the gas consumption of more than 30 million households for one year. The LNG will be supplied from Venture Global's plant in Plaquemines, Louisiana, which is expected to start production in 2024.
In addition, Sinopec's subsidiary Unipec also buy a total of 3.5 million tonnes of LNG from the Calcasieu Pass project owned by Venture Global LNG for a shorter duration.
The deal was signed at the ceremony of the 4th China International Import Expo. During the Expo, Sinopec and 34 partners from 14 countries signed 42 products in 11 categories, involving dozens of categories of products such as crude oil, natural gas, chemical equipment and materials, and the signing amount reached $41.5 billion, more than the previous session.
The signing of such a massive volume of LNG cautioned market observes that Australia, the main LNG supplier to China, may take a blow as this could be a signal that China is trying to gradually get rid of dependence on Australia's fuel and raw materials, given the deteriorated bilateral relation.
Customs data showed China imported 20.5 million tonnes of LNG from Australia in the first eight months, whereas shipments from the U.S. were 5.4 million tonnes over the same period last year.
(Writing by Alex Guo Editing by Tammy Yang)
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