Thursday, February 9, 2012

Cheniere and KOGAS sign 20-year LNG sale and purchase agreement

Cheniere Energy Partners, L.P. (NYSE Amex: CQP) announced on Jan. 30 that its subsidiary, Sabine Pass Liquefaction, LLC, has entered into a liquefied natural gas sale and purchase agreement with Korea Gas Corp. (KOGAS) under which KOGAS has agreed to purchase approximately 3.5 million tons per annum of LNG when Cheniere’s train three begins operations.

Under the SPA, KOGAS will purchase LNG on an FOB basis for a purchase price indexed to the monthly Henry Hub price plus a fixed component. LNG will be loaded onto KOGAS's vessels.

The SPA has a term of 20 years beginning at the first commercial delivery for train three, and an extension option of up to 10 years. Deliveries from train three are expected to occur as early as 2017.

"KOGAS is our fourth foundation customer and we have now sold 16 mtpa of the 18 mtpa being developed at the Sabine Pass LNG terminal," said Charif Souki, chairman and CEO. "We look forward to finalizing all necessary steps in order to begin construction of the first phase of our project early this year and more importantly, to becoming the first LNG exporter in the Continental U.S."

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