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    Cheniere, Petronas Ink LNG Deal

Summary

Contract dependent on positive FID for Sabine Pass Train 6.

by: Dale Lunan

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Cheniere, Petronas Ink LNG Deal

Cheniere Energy, the US LNG developer with a pair of liquefaction terminal projects in Texas and Louisiana, said December 18 it has signed a 20-year LNG sales and purchase agreement (Spa) with Malaysia’s state-owned Petronas.

The Spa covers 1.1mn metric tons/year of LNG from Cheniere’s Sabine Pass terminal in Louisiana to take effect for 20 years following the first commercial deliveries from the terminal’s sixth train, which is currently undergoing commercialisation ahead of a final investment decision (FID).

The LNG will be delivered to Petronas on a free-on-board basis and is indexed to the monthly Henry Hub price, plus a fee.

“Petronas is one of the largest and most experienced participants in the global LNG market, and we are pleased to have it as our newest foundation customer at Sabine Pass, supporting Train 6,” Cheniere Energy CEO Jack Fusco said.

Early engineering, procurement, and site preparation activities have recently begun for the 4.5mn mt/yr Train 6, Fusco said, adding that FID is expected in 2019.

Ahmad Adly Alias, vice president, LNG marketing and trading for Petronas, said the Train 6 volumes would be added to the company’s global LNG supply portfolio.