British, French buyers to receive commercial cargoes from Cheniere Sabine Pass starting August: company

Cheniere Energy will begin making commercial deliveries in August under long-term offtake contracts with Britain’s Centrica and France’s Total now that it has achieved substantial completion of its fifth train at its Sabine Pass LNG export terminal in Louisiana, the company said.

The biggest US LNG exporter has been ramping up service at Sabine Pass and its terminal near Corpus Christi, Texas, while also developing a mid-scale expansion and a new feedgas pipeline amid increased competition for domestic liquefaction services.

The number of US export terminals in operation is expected to double by the end of this year, and more than a dozen new liquefaction projects are actively being developed. Cheniere, for its part, has been aggressively pursuing new long-term supply agreements with buyers in Europe and Asia, in an effort to solidify its market position.

Cheniere is currently operating five trains at Sabine Pass and is nearing a final investment decision on a sixth train there. At its Texas facility, it is operating one train and building two more.

On March 4, the company announced that substantial completion of Train 1 at Corpus Christi had been achieved, and with that milestone it said that it would begin commercial deliveries from the Texas terminal in June to Spain ‘s Endesa and Indonesia ‘s PT Pertamina under long-term agreements. Those contracts were signed in 2013 and 2014.

Two 20-year agreements that were signed with Endesa called for the Spanish electric utility to buy a total of approximately 2.25 million mt/year of LNG upon commencement of service from Cheniere’s Texas facility. Two 20-year agreements signed with state-owned oil and gas company PT Pertamina of Indonesia encompassed approximately 1.52 million mt/of LNG from Corpus Christi trains 1 and 2.

In a statement Friday announcing substantial completion of Train 5 at Sabine Pass, Cheniere said that commissioning had been completed that that contractor Bechtel had turned over care, custody and control of the unit.

The offtake agreements tied to that train with Centrica and Total were signed in 2012 and 2013.

Centrica agreed to a 20-year deal to purchase approximately 1.75 million mt/year of LNG from Cheniere upon the start of Sabine Pass Train 5 operations. Total agreed to a 20-year deal to buy about 2 million mt/year upon the start of Train 5 operations. Total’s arrangement includes seasonal volumes.

With three of the four deals across the two terminals tied to European buyers, the start of commercial deliveries comes at an opportune time for Cheniere. Europe has been a favored destination for US LNG cargoes in recent months, with stronger netbacks than cargoes shipped to Asia.
Source: Platts