Cheniere unit, Iberdrola sign LNG supply deal

Corpus Christi Liquefaction LLC, a subsidiary of Cheniere Energy Inc., Houston, has entered into a sale and purchase agreement (SPA) under which Spain’s Iberdrola SA will purchase 400,000 tonnes/year of LNG on the start of operations of Train 1 of the LNG export facility under development near Corpus Christi, Tex.

The term of the agreement will extend for 20 years beyond the date of first commercial delivery from the second train—during which the agreement will rise to 800,000 tpy of LNG—with an extension option of up to 10 years. Deliveries from Train 2 are expected to occur in 2019.

Iberdrola will purchase LNG on a fob basis for a purchase price indexed to the monthly Henry Hub price plus a fixed component. LNG will be loaded onto Iberdrola's vessels.

The Corpus Christi Liquefaction project is being designed and permitted for as many as three trains, with aggregate design production capacity of 13.5 million tpy of LNG.

To date, Cheniere has entered into SPAs aggregating 3.8 million tpy of LNG, said Charif Souki, Cheniere chairman and chief executive officer, adding that the company are in “advanced discussions with other counterparties” and working towards finalizing additional SPAs.

Corpus Christi Liquefaction in April signed an agreement with Spanish multinational Endesa Generacion SA for supply of 1.5 million tpy of LNG (OGJ Online, Apr. 2, 2014).

Cheniere believes LNG exports from the Corpus Christi Liquefaction project could start as early as 2018.

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