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Cheniere and Iberdrola sign 20-Year LNG sale and purchase agreement

Cheniere Energy Inc.

Cheniere Energy Inc. (NYSE MKT: LNG) reports that its subsidiary, Corpus Christi Liquefaction LLC, has entered into a liquefied natural gas (LNG) sale and purchase agreement (SPA) with Iberdrola SA, under which Iberdrola has agreed to purchase 0.4 million tonnes per annum (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 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 20 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 10 years. Deliveries from Train 2 are expected to occur in 2019.

The SPA is subject to certain conditions precedent, including, but not limited to, Corpus Christi Liquefaction receiving regulatory approvals, securing necessary financing arrangements, and making a final investment decision to construct Train 2.

Iberdrola is a Spanish energy company that generates, distributes, trades, and markets electricity and natural gas. The company is listed on the Bolsa de Madrid and is part of the IBEX 35 index. It employs approximately 28,200 people. It is Spain's largest power company by installed capacity with total power generation capacity of 45,000 MW worldwide. Iberdrola has access to regasification capacity in Spain, the UK, and the US.

 

 

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