Cheniere Energy's subsidiary Sabine Pass Liquefaction has signed a 20-year sale and purchase agreement with Centrica to sell the UK energy company 1.75 million mt/year of LNG from its fifth liquefaction train, once it begins operations, Cheniere said Monday.
Sabine Liquefaction is developing six liquefaction trains, each with an expected nominal capacity of about 4.5 million mt/year, adjacent to the Sabine Pass LNG import terminal in Cameron Parish, Louisiana.
Construction on the first two trains has already begun, while that on the third and fourth trains is expected to start in the first half of 2013, Cheniere said. The permitting process and preliminary engineering have been initiated for the fifth and sixth trains, it added.
Under the SPA, Centrica will buy 91,250,000 MMBtu or about 1.75 million mt of LNG annually on an FOB basis, paying the monthly Henry Hub price plus a fixed component. The SPA has a 10-year extension option beyond its 20-year time frame. Deliveries from Train 5 are expected to start as early as 2018, Cheniere said.
The SPA is subject to, among other things, Sabine Liquefaction getting the regulatory approvals for Train 5, securing necessary financing arrangements, making a final investment decision, and issuing a notice to proceed with Train 5, the company said.
With the latest deal, Sabine Liquefaction now has commercial contracts for five trains, and the total contracted volume for Train 5 has reached 3.75 million mt/year, including an earlier SPA with Total Gas & Power North America.
Earlier in March, Cheniere submitted an application to the US Department of Energy for licenses to export additional volumes of LNG to countries that have free trade agreements with the US as well as to non-FTA nations, to fulfill its deal with Total.
Sabine Liquefaction already has permits from the DOE to export 2.2 Bcf/d of gas (about 17.18 million mt/year of LNG) from its terminal, including to non-FTA countries - the only Lower-48 volumes authorized for non-FTA exports.
Prior to the Centrica agreement, Sabine Liquefaction had five LNG SPAs - with BG Gulf Coast (5.5 million mt/year), Spain's Gas Natural Fenosa (3.5 million mt/year), Korea Gas Corporation (3.5 million mt/year), India's GAIL (3.5 million mt/year), and Total (2 million mt/year).
In addition, the company has entered into an SPA with Cheniere Marketing for up to 2 million mt/year of LNG that is produced but not already committed to third parties.
The BG and Cheniere Marketing SPAs commence with the start of Train 1 operations and the Gas Natural Fenosa deal with the start of Train 2. The Kogas and GAIL SPAs commence with the start of Train 3 and 4 operations respectively. The Total and Centrica SPAs commence with the start of Train 5 operations.
Source: Platts