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Cheniere Signs Long-Term LNG Sale and Purchase Deal with Foran

Cheniere Marketing International, LLP, a subsidiary of Cheniere Energy, Inc. (LNG), has signed a binding 20-year liquefied natural gas sale and purchase agreement (SPA) with Foran Energy Group Co., Ltd, a China-based company engaged in the transmission and distribution of natural gas.

Following the news, shares of Cheniere rose 3.8% on Wednesday. Cheniere Energy owns and operates LNG terminals, and develops, constructs, and operates liquefaction projects near Corpus Christi, Texas, and at the Sabine Pass LNG terminal. 

As per the agreement, Foran will buy about 0.3 million tonnes per annum of LNG from Cheniere Marketing on a delivered ex-ship basis for a term of 20 years beginning in January 2023. The purchase price for LNG under the SPA is indexed to the Henry Hub price, plus a fee. (See Cheniere stock charts on TipRanks)

The President and CEO of Cheniere, Jack Fusco, said, “This SPA once again demonstrates the strength of the global LNG market today, particularly in China, and underscores the value of Cheniere’s leading ability to tailor solutions to help our customers advance their long-term energy and environmental priorities.”

Stock Rating

Recently, Bank of America Securities analyst Julien Dumoulin Smith maintained a Buy rating on Cheniere and raised the price target to $124 (13.5% upside potential) from $123.

Overall, the Street is bullish on the stock and has a Strong Buy consensus rating based on 15 unanimous Buys. The average Cheniere price target of $124.44 implies upside potential of about 13.9% from current levels.

Smart Score

Cheniere scores a “Perfect 10” from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.

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