Cheniere Energy Partners, L.P. ("Cheniere Partners") (NYSE MKT: CQP) announced today that its
subsidiary, Sabine Pass Liquefaction, LLC ("Sabine Liquefaction"), has entered into a liquefied natural gas ("LNG") sale and purchase agreement ("SPA") with Total Gas & Power North America, Inc. ("Total") under which Total has agreed to purchase 91,250,000 MMBtu of LNG annually plus 13,500,000 MMBTU of seasonal LNG volumes upon the commencement of train five operations. These volumes represent approximately 2.0 million tonnes per annum ("mtpa") of the approximately 4.5
mtpa of nominal capacity of train five being developed at Sabine Liquefaction.
Sabine Liquefaction is currently developing five liquefaction trains adjacent to the Sabine Pass LNG terminal. The first two trains are under construction and the third and fourth trains are expected to commence construction in 2013. As previously announced, a partial assignment agre ement was entered into between Sabine Liquefaction and Total, allowing Sabine Liquefaction to gain access to
services under Total's terminal use agreement with Sabine Pass LNG, L.P., including Total's berthing and storage capacity, making further expansion of the LNG export capabilities at the Sabine Pass LNG terminal possible.
Under the SPA, Total will purchase LNG on an FOB basis, under which LNG will be loaded onto Total's vessels, for a purchase price indexed to the monthly Henry Hub price plus a fixed component. The SPA has a term of twenty years commencing upon the date of first commercial delivery for train five, and an extension option of up to ten years. Deliveries from train five are expected to occur as early as 2018. The SPA is subject to certain conditions precedent, including but not limited to Sabine Liquefaction receiving regulatory approvals, securing necessary financing arrangements, making a final investment decision , and issuing a notice to proceed for train five.
"Total, one of our longstanding customers at Sabine Pass, will become the next foundation customer for LNG exports as Sabine Liquefaction further expands its liquefaction project," said Charif Souki, Chairman and CEO. "Total recently agreed to partially assign its rights to us in order to accommodate further development of Sabine Liquefaction's facility and has subsequently contracted for approximately half of the capacity for a fifth train. Based on this contract and additional indications of interest, we are moving forward with the development of train five."
Total is a leading producer in the LNG sector, with strong and diversified positions along the LNG chain. In addition to Australia, Total has interests in LNG projects in Indonesia, Nigeria, Norway, Oman, Qatar, the United Arab Emirates, Yemen, Angola and Russia. Total has also secured long-term access to LNG re-gasific ation capacity located in key LNG importing countries. Total is developing trading, marketing and logistics businesses to offer its natural gas and LNG production directly to customers.
I own this stock and like the long term possibilities--even after the "fiscal cliff" being averted.
I have not been following the stock closely, but today when I read this post, it dawned on me that I hasve no idea when the first two trains come online. Is is when the Panama Canal expansion is completed or is there a different time frame?