Regional: Cheniere and GAIL India sign 20-year LNG supply deal

Cheniere Energy Partners, L.P., a company listed in New York Stock Exchange, announced that its subsidiary, Sabine Pass Liquefaction, LLC, has entered into a liquefied natural gas (LNG) sale and purchase agreement (SPA) with GAIL (India) Limited under which GAIL has agreed to purchase approximately 3.5 million tonnes per annum (MTPA) of LNG from train four.

Prior to the commencement of train four operations, GAIL will purchase bridge volumes of approximately 0.2 MTPA upon the commencement of operations of train two.

Sabine Liquefaction is developing a liquefaction project at the Sabine Pass LNG terminal that would include up to four liquefaction trains capable of producing up to 18 MTPA of LNG. The terminal is located on 853 acres of land along the Sabine Pass River on the border between Texas and Louisiana.

Sabine Liquefaction is targeting selling approximately 14 MTPA of the capacity under long-term SPAs. The project is being developed in phases.

Sabine Liquefaction recently announced that it has reached its targeted annual contract quantity of 7 MTPA for the first phase and is advancing towards making a final investment decision for the development and construction of two liquefaction trains. The SPA with GAIL represents the first contract for the second phase of the project, which will also include two liquefaction trains with combined production capacity of 9 MTPA.

Under the SPA, GAIL 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 GAIL'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 ten years. Delivery of the bridge volumes are to occur with the commencement of operations of train two, which is expected in 2016 and deliveries from train four are to occur upon commencement of its operations, which is expected as early as 2017.

"GAIL will join BG and Gas Natural Fenosa as the next foundation customer for our Sabine Pass liquefaction project. GAIL is India 's leading natural gas company and its largest shareholder is the Government of India ," said Charif Souki , Chairman and CEO of Cheniere Energy Partners.

B. C. Tripathi , Chairman & Managing Director, GAIL (India) Limited said the SPA with Cheniere will help GAIL to ensure long term gas supply for the growing demand in the Indian market.

?This will be in addition to other initiatives being undertaken by GAIL which includes building captive LNG facilities in India and augmenting its transmission capacity from 175 MMSCMD to over 300 MMSCMD over the next two years," Tripathi said.

GAIL ( India ) Limited is India 's flagship gas transmission and marketing company under the Ministry of Petroleum and Natural Gas, Government of India. Over the years, GAIL has transformed into an integrated energy company with global footprints by means of integrating along the natural gas value chain. (romel)

Milestone	Target Date
	Phase 1	Phase 2
DOE export authorization	Received	Received
Definitive commercial agreements  - BG Gulf Coast LNG, LLC - Gas Natural Fenosa - Gail	Completed 7 mtpa 3.5 mtpa 3.5 mtpa	Target of 7 mtpa     3.5 mtpa
EPC contract	Complete	TBD
Financing commitments	4Q11/1Q12	TBD
FERC construction authorization	2012	TBD
Commence construction	2012	TBD
Commence operations	2015/2016	2017