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."

Cheniere and Gas Natural Fenosa sign 20-year LNG agreement

SABINE PASS, La. - Cheniere Energy Partners, L.P. (NYSE Amex: CQP) announced on Nov. 21 that its subsidiary, Sabine Pass Liquefaction, LLC, has entered into a liquefied natural gas sale and purchase agreement with Gas Natural Aprovisionamientos, a subsidiary of Gas Natural Fenosa, under which Gas Natural Fenosa has agreed to purchase 3.5 million tons per annum of LNG.

Sabine Liquefaction is developing liquefaction capabilities to produce 9.0 mtpa of LNG in the first phase of its project at the Sabine Pass LNG terminal owned by Cheniere Partners. This contract with Gas Natural Fenosa is another milestone for the project as Sabine Liquefaction has now reached its contract capacity target of 7.0 mtpa, which is expected to support the construction of the first two trains.

Under the agreement, Gas Natural Fenosa will pay Sabine Liquefaction a fixed sales charge for the full annual contract quantity and will also pay a contract sales price for LNG purchases based on the applicable Henry Hub index traded on the New York Mercantile Exchange.

LNG will be loaded onto Gas Natural Fenosa's vessels.

The SPA has a term of 20 years commencing upon the date of first commercial delivery, and an extension option of up to 10 years. LNG deliveries are expected to commence in 2016.

"We welcome Gas Natural Fenosa as the next foundation customer for our Sabine Pass liquefaction project. Gas Natural Fenosa is a leading, integrated natural gas and power utility and a significant participant in the natural gas and LNG markets," said Charif Souki, Chairman and CEO.

Gas Natural Fenosa is one of the leading multinational companies in the gas and electricity sector. The company operates in more than 25 countries, has more than 20 million customers and has 15.8 GW of installed power. It is the largest integrated gas and electricity company in Spain and Latin America, leading the natural gas sales market in the Iberian Peninsula, and it is the biggest distributor of natural gas in Latin America. With a fleet of 10 LNG tankers, it is a company of reference for LNG/NG in the Atlantic and Mediterranean basins, where it operates 30 bcm.

As currently contemplated, the Sabine Pass Liquefaction Project is being designed and permitted for up to four modular LNG trains, each with a nominal capacity of approximately 4.5 mtpa. The Liquefaction Project is expected to be constructed in phases, with each LNG train commencing operations approximately six to nine months after the previous train.

The first phase will include two liquefaction trains.

Calais LNG folds in Maine, leaving Downeast as only remaining LNG project

CALAIS, Maine - Calais LNG has withdrawn its permit application with state environmental regulators.

Unable to find new money after a primary investor pulled out, the developer blamed lingering impacts from the global financial meltdown.

Calais LNG was one of three terminals planned for the St. Croix River and Passamaquoddy Bay, on the Maine-New Brunswick border.

Following its demise, and the failure of an earlier competitor, Quoddy Bay LNG, a single project now represents the final hope for bringing a new source of natural gas directly to eastern Maine.

"We always believed we'd be the last man standing," said Dean Girdis, co-founder and president of Downeast LNG.

Downeast LNG has a site in Robbinston, downriver from Calais. It's slowly moving through the regulatory process and hopes to gain federal permits next year, and state permits in 2012.

NorthernStar suspends Bradwood Landing LNG terminal in Oregon

PORTLAND, Ore. - NorthernStar Natural Gas Inc. said on May 4 that it is suspending efforts to develop a liquefied natural gas import terminal at
Bradwood Landing on the Columbia River, 25 miles east of Astoria.
The announcement ends a six-year effort that consumed as much as $100
million of investors' capital and countless hours of regulatory work while sparking a firestorm of public opposition from property owners and environmentalists.
The Houston-based energy development company sent out a one-page news release on May 4 quoting NorthernStar President Paul Soanes saying extended delays in state and federal permitting and the difficult investment environment "have forced us to suspend development."
The company characterized its move as a "suspension" of the project, not a termination.
Mike Carrier, natural resources policy director for Gov. Ted Kulongoski, said the company told him on May 4 that another developer could conceivably resurrect the project. But Carrier said the company told him its financial backer, a private equity fund that has put $100 million into the company's LNG proposals in Oregon and California, was pulling the plug.
NorthernStar began development work nearly six years ago at an abandoned mill site on the lower Columbia River. At the time, gas prices were high and importing the commodity to the United States from abroad seemed like a lucrative opportunity.
Bradwood's suspension also has implications for a controversial 200-mile pipeline that Northwest Natural Gas Co. and TransCanada Corp. were planning to build to connect the LNG terminal with an interstate pipeline in central Oregon near Maupin.

DOT rules Weaver’s Cove Energy must recalculate LNG gas cloud

FALL RIVER, Mass. - A new Department of Transportation ruling requires Weaver’s Cove Energy to recalculate how far a possibly flammable cloud of escaped gas might travel.
The opinion, requested from the DOT by the city of Fall River, also states that the full length of a gas pipeline the company wants to build will be under DOT regulation.
Weaver’s Cove is planning to build an offshore berth just south of the Braga Bridge. Liquefied natural gas from tanker ships would be unloaded there and piped four miles up the Taunton River to the proposed tank site at Weaver’s Cove.
“The city asked for this ruling in November of 2009,” said Fall River Corporation Counsel Steven Torres. “I’m very pleased. This is a great way to start the year.
“The DOT has now said that all of the project is subject to their siting regulations and that any exclusion zones will run the whole length of the pipeline, including where it comes on shore,” Torres said.
“They were using disproven science to calculate thermal dispersion,” said Michael Miozza, vice president of anti-LNG organization The Coalition for the Responsible Siting of LNG. “They’re trying to misrepresent how far that cloud will travel.
The statement from the DOT said Weaver’s Cove Energy’s method for calculating how far a gas cloud would travel are “impracticable” and requires the company to come up with new method of calculating, though the DOT does not specify a proper method.

Court rules against Baltimore LNG proposal

BALTIMORE, Md. - A federal appeals court has upheld Maryland's decision to deny a water quality certification for a liquefied natural gas terminal at Baltimore's Sparrows Point.
A three-judge panel of the 4th U.S. Circuit Court of Appeals denied Arlington-based AES Corp.'s petition for review in late December. AES had argued Maryland failed to decide on its application within a year of its proposal and the state's certification denial was "arbitrary and capricious" because it considered water flow a form of pollution under the Clean Water Act.
But the court panel ruled that Maryland regulators decided within one year of the Army Corps of Engineers' provision of necessary information - not when AES had submitted its application.
Further, the opinion holds that Maryland properly considered how water flow would be affected by the additional dredging needed for LNG tankers. The court agreed with the state that the dredging would induce "pollutants" by creating deep channels where the dissolved oxygen levels would not meet water standards.
"Maryland examined the relevant data pertaining to the effect on water quality in the areas of the proposed deep channel dredging and articulated a satisfactory explanation for its denial on that basis," the panel wrote.
The ruling could have an effect on other proposed LNG facilities, especially those in Oregon where the state is still reviewing required permits and similar environmental concerns have been raised.

Port Dolphin gets license OK for Florida deepwater LNG facility

MANATEE, Fla. - Port Dolphin’s proposal to build a deepwater port off Anna Maria Island inched closer to licensing on Oct. 26.
That’s when a record of decision was signed for Port Dolphin Energy LLC’s application for a license to build a deepwater liquefied natural gas port about 28 miles off Anna Maria Island.
The regulatory requirement awarded to Port Dolphin’s proposal clears the company to receive a project license from the U.S. Maritime Administration.
“We are pleased at the progress we have made in meeting the regulatory requirements for our new deepwater (liquefied natural gas) port,” said Sveinung Stohle, president and chief executive officer of Hoegh LNG, Port Dolphin’s parent company.
“The port will be an important new source of much-needed natural gas for the state of Florida.”
The offshore deepwater port will be a platform where ships can unload liquefied natural gas that will be shipped through a pipeline that comes ashore at Port Manatee.

Florida county officials support compromise pipeline route

MANATEE, Fla. - Manatee County commissioners said on Sept. 3 that they will support a compromise route for the proposed Port Dolphin pipeline, but only with conditions. Among them: That the county be allowed to remove high-quality beach sand in the natural gas pipeline’s proposed path before it is built.
That’s the position the county plans to submit to the U.S. Coast Guard, which is taking public comment on a draft environmental study of Port Dolphin Energy LLC’s $1 billion proposal.
The company wants to put a platform 28 miles from shore, where ships would unload liquefied natural gas. The gas then would be shipped through the pipeline, which would come ashore at Port Manatee and connect with existing land pipelines for distribution.
County and Longboat Key officials initially objected to the pipeline’s original proposed route because it would cross prime sources of sand for beach renourishment. The company later agreed to move the pipeline farther north but not far enough in the eyes of town officials, who continue to explore possible legal action.
“We are pleased that there is a potential resolution for us to move sand out of the way in advance,” said Bruce St. Denis, Longboat Key’s town manager.
Port Dolphin officials also have said they are willing to help the county get the sand by paying the permitting costs, estimated at $400,000 to $500,000, as well as sharing in the dredging costs, said Charlie Hunsicker, the county’s natural resources director. The Florida Department of Environmental Protection also has indicated a willingness to reduce the permitting process from two or three years to as little as one year, he said.