Cheniere Energy Inc. (NYSE: LNG) through subsidiary Cheniere Marketing LLC, entered into a long-term liquefied natural gas (LNG) sale and purchase agreement (SPA) with Galp Trading S.A., a subsidiary of Galp Energia, SGPS, S.A.
Under the agreement, Galp Trading has agreed to purchase approximately 0.5 million tonnes per annum (“mtpa”) of LNG for 20 years from Cheniere Marketing on a free-on-board basis for a purchase price indexed to the Henry Hub price, plus a fixed liquefaction fee.
Deliveries are expected to commence in the early 2030s and are subject to, among other things, a positive Final Investment Decision with respect to the second train (“Train Eight”) of the Sabine Pass Liquefaction Expansion Project (“SPL Expansion Project”). The SPA includes a limited number of early cargoes to be purchased by Galp prior to the start of Train Eight.
“We are pleased to enter into this long-term agreement with Galp, a leader across Iberia’s energy sector, which reinforces the critical role US natural gas is expected to play in Europe’s energy mix into the second half of this century,” said Jack Fusco, Cheniere’s President and Chief Executive Officer.
“We look forward to providing our flexible, reliable and cleaner burning LNG to Galp under this new long-term agreement. This SPA is expected to provide further support for the SPL Expansion Project, and demonstrates continued momentum as we progress development of the project.”
The SPL Expansion Project is being developed for up to approximately 20 mtpa of LNG capacity, inclusive of estimated debottlenecking opportunities. In February 2024, certain subsidiaries of Cheniere Energy Partners, L.P. (NYSE: CQP) submitted an application to the Federal Energy Regulatory Commission for authorization to site, construct and operate the SPL Expansion Project, as well as an application to the Department of Energy requesting authorization to export LNG to Free-Trade Agreement (“FTA”) and non-FTA countries.