Regional: Cheniere, KOGAS sign LNG agreement
Tuesday, January 31 2012 - 03:06 AM WIB
Cheniere Energy Partners, L.P. said that its subsidiary, Sabine Pass Liquefaction, LLC, had signed a 20-year liquefied natural gas (LNG) sale and purchase agreement with Korea Gas Corporation (KOGAS).
The company announced on Monday that under the agreement KOGAS agreed to purchase approximately 3.5 million tons per annum (mtpa) of LNG upon the commencement of train three operations.
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 twenty years commencing upon the date of first commercial delivery for train three, and an extension option of up to ten years. Deliveries from train three are expected to occur as early as 2017.
The SPA is subject to certain conditions precedent, including but not limited to Sabine Liquefaction receiving regulatory approvals, securing necessary financing arrangements and making a final investment decision to construct the second phase of the liquefaction project.
"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. KOGAS is a strong addition to our portfolio of customers as it is the largest LNG importer in the world and the dominant gas provider for the Republic of Korea , a nation that is soon to become a Free Trade Nation with the U.S. " said Charif Souki, Chairman and CEO of the company.
"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."
KOGAS was incorporated by the Korean government in 1983 to engage in the development, production and distribution of liquefied natural gas. KOGAS has since grown to become the world's largest LNG importer and is the Republic of Korea 's dominant gas provider.
KOGAS operates three LNG terminals and a nationwide pipeline network that spans over 2,739km. KOGAS imports LNG from around the world and supplies it to power generation plants, gas-utility companies and city gas companies throughout the country.
Editing by Benget Besalicto Tnb.