Sinopec signs China's largest long-term LNG contract with U.S. firm

FILE PHOTO: The company logo of China’s Sinopec Corp is displayed at a news conference in Hong Kong
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BEIJING (Reuters) - China's Sinopec has signed a contract with U.S. Venture Global LNG to buy 4 million tonnes of liquefied natural gas (LNG) annually for 20 years.

The deal is the largest LNG long-term contract signed between Chinese and U.S. companies, Venture Global said in a statement. The LNG will be supplied from its plant in Plaquemines, Louisiana.

"This sales agreement is historic...This deal will also strengthen bilateral economic and trade cooperation between the U.S. and China, representing tens of billions of dollars in trade over the course of contract," Mike Sabel, Chief Executive Officer of Venture Global LNG, said in a video ceremony on Thursday.

The deal will double China's imports of U.S. LNG, he said.

China imported 6.32 million tonnes of LNG from the United States in the first nine months, Chinese customs data showed.

But the company did not specify the value of the deal or when supply would begin. Analysts expect the Plaquemines plant will begin production in 2024.

In October, Reuters reported that China had agreed three huge LNG deals with the firm as Beijing seeks to secure long-term supplies amid soaring gas prices and domestic power shortages.

Separately, Unipec, a subsidiary of Sinopec, will 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 statement said.

Sinopec expects natural gas prices in China to rise at least 20% in the fourth quarter from a year earlier, as officials of energy firms estimate gas demand will rise 10% this winter.

(Reporting by Muyu Xu and Shivani Singh; Editing by Clarence Fernandez and Kim Coghill)