Corpus Christi LNG 'sold out', says Cheniere’s Charif Souki

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Cheniere Energy has completed the long-term contracting of the output of the first two trains of its proposed Corpus Christi LNG export project in Texas, says the company’s CEO Charif Souki.

He adds: “We expect to complete all remaining necessary steps to reach a final investment decision (FID) and begin construction by early 2015." Souki told Gastech News in March that he expected the project’s first two trains to sell out within six months, when interviewed at Gastech in the Korean capital of Seoul.

The company announced at the start of July that it had signed a second sales and purchase agreement (SPA) to supply LNG from the project to Indonesia’s state-owned energy company, Pertamina. Each of the 20-year contracts involves the supply of 0.76 mtpa, taking the total volume contracted by Pertamina to 1.52 mtpa. Supplies from the second contract are due to begin when the second train starts up, the target date for which is 2019. The second contract has an extension option of up to ten years.

Export licence: This latest SPA marks the culmination of a remarkable string of long-term sales in recent months from a project that could end up going ahead faster than most observers expected.

Cheniere expects to receive approval to site, construct and operate the first two trains of Corpus Christi from the Federal Energy Regulatory Commission (FERC) early in 2015.

The project is currently second in the Department of Energy’s (DoE’s) queue for processing its application to export LNG to countries that do not have a Free Trade Agreement with the US (non-FTA countries). The project is being designed and permitted for up to three trains, with a combined production capacity of 13.5 mtpa of LNG and would include three LNG storage tanks with capacity equivalent to 10.1 Bcf and two LNG carrier docks. The company has not yet announced target dates for the third train.

Under the latest SPA, Pertamina 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 Pertamina's vessels.

"We look forward to supplying LNG to Indonesia as the country transitions to an LNG importer to meet its growing energy needs," said Souki. "To date we have entered into SPAs aggregating approximately 7 mtpa of LNG volumes, completing our long-term contracting for the first two trains of the Corpus Christi Liquefaction Project."

Woodside surprise:The day before the Pertamina announcement Cheniere took most of the LNG industry by surprise when it said that Australia’s Woodside Energy had signed an SPA to take 0.85 mtpa from Corpus Christi for a period of 20 years – the first time that an Australian company, itself a major LNG producer, has signed up for US LNG. The terms of the SPA are similar to those in the second Pertamina contract. The LNG will be loaded onto Woodside LNG ships.

The other long-term contracts for volumes from Corpus Christi have been signed with Spanish energy companies. Endesa has signed up for 2.25 mtpa, Gas Natural Fenosa for 1.5 mtpa and Iberdrola for 0.76 mtpa.

Golden Pass makes formal FERC application: In separate news, the Qatar Petroleum/ExxonMobil-sponsored Golden Pass project has just filed a formal application with the FERC for approval to site, construct and operate three trains with combined capacity of 15.6 mtpa at the existing regasification facility.

Golden Pass Regasification plant

Qatar Petroleum and ExxonMobil are proposing to construct three 5.2 mtpa trains at the Golden Pass regasification terminal, at a cost of $10 billion

The project entered the FERC pre-filing process in May of last year and the sponsors hope to get final FERC approval by September next year. If that happens the target date for first production would be September 2019. Golden Pass is one of the projects that will be a beneficiary of the recent announcement by the DoE that it proposes to re-jig the process by which export licences are granted for non-FTA countries. Golden Pass is currently in ninth in the queue for a non-FTA export licence. Under that proposal the DoE plans to scrap the existing order of precedence for processing non-FTA export applications and instead process them once projects have completed the environmental permitting process with the FERC. The proposal is currently out for consultation, with the deadline for comments being later this month. It is highly likely that the DoE will go ahead with it.

By Alex Forbes

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