Geneva-based energy and commodity trading firm Vitol has signed a 15-year liquefied natural gas (LNG) sale and purchase agreement with US-based energy company Cheniere.
Commenting on the deal Russell Hardy, Group CEO at Vitol, said that LNG will play an important role in the future energy mix and that its evolution will require a more flexible and tradeable LNG market.
Vitol has agreed to purchase approximately 0.7 million tonnes per annum of LNG from Cheniere Marketing on a free on board basis for a term of approximately 15 years beginning in 2018.
The purchase price for LNG is indexed to the monthly Henry Hub price, plus a fee.
LNG is also expected to play a major role as a fuel especially ahead of the 2020 sulphur cap.
Vitol uses a fleet of LNG ships on time charter and spot charter to deliver LNG, plus physical gas storage in six European countries and access to pipelines within the US and Canada. The company also offers ship-to-ship transfers.