Cheniere and Iberdrola Reach Corpus Christi LNG Deal

Cheniere’s unit Corpus Christi Liquefaction has entered into an LNG sale and purchase agreement (SPA) with Iberdrola, under which the Spanish company has agreed to purchase approximately 0.4 mtpa of LNG upon the commencement of operations of Train 1 of the LNG export facility being developed near Corpus Christi, Texas, and increasing to approximately 0.8 mtpa of LNG upon the commencement of operations of Train 2. 

The Corpus Christi liquefaction project is being designed and permitted for up to three trains, with aggregate design production capacity of 13.5 mtpa of LNG.

Under the SPA, Iberdrola will purchase LNG on a free on board (FOB) basis for a purchase price indexed to the monthly Henry Hub price plus a fixed component. LNG will be loaded onto Iberdrola’s vessels.

The term of the SPA will extend for twenty years beyond the date of first commercial delivery of the second train of the Corpus Christi liquefaction project, with an extension option of up to ten years. Deliveries from Train 2 are expected to occur in 2019.

“Iberdrola is the first foundation customer on Train 2 of our Corpus Christi Liquefaction Project being developed in Texas. Iberdrola is a leading European power generation and distribution company with operations located in several countries around the Atlantic Basin,” said Charif Souki, Chairman and CEO of Cheniere. “To date we have entered into SPAs aggregating approximately 3.8 mtpa of LNG volumes. We are in advanced discussions with other counterparties and are working towards finalizing additional agreements. We expect to complete all necessary steps to reach a final investment decision and begin construction by early 2015.”