China Gas buys US LNG from Venture Global under 20-year pact

China Gas Holdings agreed Sept. 14 to buy 0.5 million metric tons of liquefied natural gas per year from Venture Global under a 20-year sales agreement beginning in 2030.

The transaction lifts total long-term volume contracted between the two companies to 2.5 million metric tons annually across Venture Global's Louisiana export portfolio, the American producer said in a corporate statement.

Executed at the Gastech industry conference in Bangkok, the deal secures gas supplies despite an ongoing 15% retaliatory tariff imposed by Beijing on American liquefied methane shipments.

China Gas Holdings operates municipal distribution networks delivering fuel to residential and commercial users across hundreds of Chinese cities, making stable baseline procurement an operational priority.

The Hong Kong-listed distributor previously contracted 2.0 million metric tons annually from Venture Global in February 2023, splitting volumes equally between the Plaquemines LNG and CP2 LNG export facilities in Louisiana.

Under those 2023 agreements, supplies were arranged on a free-on-board basis, giving the Chinese buyer title to the gas at the loading port and operational control over vessel chartering.

By setting commercial deliveries to commence in 2030, China Gas Holdings secures supplies beyond near-term trade disputes and bilateral tariff reviews between Washington and Beijing.

Chinese energy importers largely paused direct imports of American fuel after Beijing enforced retaliatory tariffs, choosing instead to swap or resell contracted Gulf Coast volumes to European and Asian buyers.

The supplemental purchase agreement supports plans by China Gas Holdings to build an international trading desk capable of marketing cargoes across the Atlantic and Pacific basins, Chairman and President Liu Ming Hui said.

Global gas markets have increasingly shifted toward portfolio trading, where municipal gas companies trade physical cargoes internationally rather than solely discharging shipments into domestic regasification terminals.

Venture Global has expanded rapidly among American liquefied gas developers since starting commercial exports from its Calcasieu Pass terminal in Cameron Parish, Louisiana, in 2022.

The Virginia-based exporter relies on modular, factory-fabricated liquefaction trains to reduce capital expenditures and shorten installation timelines at its Gulf of Mexico production sites.

Venture Global is constructing its Plaquemines LNG facility downriver from New Orleans, while advancing regulatory permitting and customer marketing for its proposed CP2 project.

The company maintains more than 100 million metric tons of annual export capacity across operating, construction and development stages, according to corporate investor filings.

Long-term sales contracts running 20 years provide the essential revenue backing required to secure commercial debt financing for liquefaction trains, storage tanks and export jetties, Chief Executive Mike Sabel said.

China remains the world's leading importer of liquefied natural gas, but domestic demand growth has moderated as state planners prioritize overland pipeline imports from Russia and Central Asia.

Beijing also has accelerated domestic coal-to-gas industrial conversions and expanded renewables capacity, requiring gas distributors to focus on flexible, cost-competitive fuel contracts to maintain operating margins.

State-owned majors such as PetroChina, Sinopec and China National Offshore Oil Corporation control dominant positions over national import terminals and high-pressure trunkline pipeline systems.

Independent municipal distributors like China Gas Holdings pursue direct overseas purchase contracts to bypass state-run intermediaries, reducing wholesale city-gate costs and improving supply resilience during peak winter demand periods.

United States liquefaction contracts offer natural gas indexed to the Henry Hub benchmark rather than crude oil prices, providing Asian utilities with structural portfolio hedging against global oil price swings.

Asian buyers across Japan, South Korea and Taiwan have similarly sought long-term Gulf Coast supply contracts for the 2030s to replace expiring legacy arrangements from Southeast Asia and Australia.

Growing competition for post-2028 export slots has encouraged Asian utilities to commit early to proposed American liquefaction expansions despite lingering regulatory and trade uncertainties.

The official announcement does not state the liquefaction fee, the indexation formula tied to Henry Hub gas benchmarks, or the specific Louisiana facility designated for the new increment.

The companies also did not disclose whether the agreement includes destination flexibility clauses that permit cargo diversion without financial penalty if Chinese import tariffs remain in effect in 2030.

Deliveries under the newly signed 20-year sales and purchase agreement are scheduled to take effect on Jan. 1, 2030, and run through Dec. 31, 2049, according to company regulatory filings.