Cheniere secures long-term LNG agreement in Korea
By Jack Burke23 May 2023
Supply to come from Sabine Pass Liquefaction Expansion Project
Cheniere Energy’s subsidiary, Cheniere Marketing International, has entered into a long-term liquefied natural gas (LNG) sale and purchase agreement with Korea Southern Power Co.
Under the SPA, KOSPO has agreed to purchase approximately 0.4 mtpa of LNG from Cheniere Marketing on a delivered ex-ship basis from 2027 through 2046, with a smaller annual quantity to be delivered starting in 2024. The purchase price for LNG to be delivered under the SPA prior to 2027 will be a market-based price, after which the purchase price will be indexed to the Henry Hub price, plus a fee.
The volumes associated with the SPA from 2028 through 2046 are subject to a positive final investment decision with respect to the first train of the Sabine Pass Liquefaction Expansion Project.
“We are pleased to enter into this long-term LNG contract with KOSPO, the leading power generation company in Korea, in support of KOSPO’s growing natural-gas fired power generation capacity,” said Jack Fusco, Cheniere’s President and Chief Executive Officer. “This SPA is expected to support the SPL Expansion Project, and we are excited to build commercial momentum as the project’s development progresses. This SPA further highlights Cheniere’s leadership in providing flexible, cleaner burning energy supply to meet both the energy security needs and environmental goals of our customers in both the short and long term.”
The SPL Expansion Project is being developed to include up to three natural gas liquefaction trains with an expected total production capacity of approximately 20 mtpa of LNG. In February 2023, certain subsidiaries of Cheniere Energy Partners, L.P. initiated the pre-filing review process with respect to the SPL Expansion Project with the Federal Energy Regulatory Commission under the National Environmental Policy Act.