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Cheniere Train 5 contracted to Total and Centrica

Train 5’s capacity of 3.75m t/y has been contracted on a long-term FOB basis under sale and purchase agreements with the French major Total and Centrica

Cheniere Energy has taken its final investment decision on the fifth train at its Sabine Pass liquefaction plant. Train 5’s capacity of 3.75m t/y has been contracted on a long-term FOB basis under sale and purchase agreements with the French major Total and Centrica, the UK’s largest utility. They will pay Cheniere for sourcing and liquefying and loading the LNG on to their tankers.

The plant is designed to consist of six trains, each with nameplate capacity of about 4.5m t/y. Cheniere is the sole owner. Its first train is due to start up at the end of this year and later ones will arrive every six to eight months after, with the fifth due in 2018. Bechtel is doing the engineering.

Cheniere has secured financing for $4.6bn for the fifth train, replacing its existing credit facilities. Korean lenders are among them.

Although Cheniere has firm sales contracts or memoranda of understanding for nearly all its capacity to third parties it will have about 9m t/year for its own short-term trading from Corpus Christi. From the six trains at Sabine Pass it has contracted to sell 19.75m t/y.

Some of that is going to France. Cheniere signed a contract with EDF Energy in early August for the delivery of up to 26 cargoes – about 600,000 metric tons/year – through 2018. The price will be linked to the Dutch title transfer facility, a virtual delivery point in continental Europe, the nearest liquid one for France.

In addition to the 26 cargoes under these EDF transactions, Cheniere Marketing has sold 42 cargoes to date with delivery expected from Sabine Pass in the 2016-2018 timeframe. The majority of these cargoes were sold to customers on a DES basis whereby Cheniere Marketing will use its chartered vessels to deliver the LNG to the requested terminal. The sales price for these 42 cargoes is based on an applicable Henry Hub index price plus a fixed fee. In total, Cheniere Marketing has executed agreements for the sale of up to 68 cargoes, or up to 250m MMBtus (4.8m mt) to buyers in Europe and Asia through 2018.

Furthermore, Cheniere Marketing recently announced the sale of approximately 0.6 mtpa of LNG under a 20-year SPA with Central El Campesino, which is expected to be delivered from the CCL Project. The SPA is subject to the Central El Campesino power project reaching a final investment decision. LNG will be sold on a DES basis with the sales price based on an applicable Henry Hub index plus a fixed fee.

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