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US LNG exporting giant Cheniere has signed a long-term deal to supply liquefied natural gas to Portuguese energy firm and LNG player Galp.
Under the 20-year sales and purchase deal, Galp will buy from Cheniere 0.5 mtpa of LNG contingent to FID of the second train of the Sabine Pass liquefaction expansion project, currently under development, according to a statement by Galp released on Monday.
Also, the deal includes access to a limited number of “early” LNG cargoes, from 2027 and up to the start of the second train, it said.
Galp’s volumes will be purchased on a FOB basis and priced indexed to Henry Hub plus a fixed liquefaction fee.
“This agreement further enhances Galp’s LNG sourcing basket with access to competitive US volumes, adding flexibility and diversity to its portfolio,” it said.
Galp already has a 20-year LNG supply deal with US LNG exporter Venture Global, but the latter has not yet declared commercial operations at the Calcasieu Pass facility since shipping the first commissioning cargo on March 1, 2022.
The SPA signed back in 2018 includes the supply of one mtpa from the Calcasieu Pass plant to Galp.
Cheniere is the largest LNG exporter in the US.
The company’s Sabine Pass facility in Louisiana currently has a capacity of about 30 mtpa following the launch of the sixth train in February 2022.
In addition, Cheniere aims to build two new liquefaction trains as part of the Sabine Pass Stage 5 expansion project to add up to 20 mtpa of capacity to the giant facility.
Besides the Sabine Pass plant, Cheniere’s three-train Corpus Christi plant in Texas can produce about 15 mtpa of LNG and is undergoing expansion to add more than 10 mtpa of capacity.
The Stage 3 expansion project at Cheniere’s Corpus Christi LNG export plant in Texas is 62.4 percent complete, according to the June construction report filed with the US FERC.
The US LNG exporting giant is expecting to start production at the first train later this year.
On top of this expansion, Cheniere plans to build two more liquefaction trains as part of the third expansion phase at the Corpus Christi plant.
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