Cheniere Marketing, a subsidiary of Houston-based energy company Cheniere Energy, has entered into a long-term liquefied natural gas (LNG) purchase and sale agreement with Korea Southern Power (KOSPO), Cheniere Energy said in a statement of press
Under the deal, Korean power generation company KOSPO will buy around 0.4 million metric tonnes per annum (mtpa) of LNG from Cheniere Marketing on a ship-to-ship basis from 2027 to 2046, all and that smaller annual quantities will be delivered starting in 2024. The purchase The price of LNG delivered before 2027 will be based on the market, after which the price will be indexed to the Henry Hub reference value, plus a fee , Cheniere said.
The deal volumes are “subject to a positive final investment decision regarding the first train of the Sabine Pass liquefaction expansion project” by Cheniere Energy Partners LP (Cheniere Partners).
Cheniere Partners owns the Sabine Pass LNG terminal located in Cameron Parish, Louisiana. The terminal has natural gas liquefaction facilities made up of six liquefaction trains, with a total production capacity of approximately 30 mtpa of LNG, according to the company’s website. The Sabine Pass Liquefaction 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.
Higher profit in the first quarter
Earlier this month, Cheniere Partners reported net income of $1.9 billion for the three months ended March 31, an increase of about $1.8 billion a year. The company said the increase was primarily due to favorable non-cash changes in the fair value of commodity derivatives and increased LNG volumes delivered.
Adjusted EBITDA decreased year-over-year by approximately $5 million in the quarter, it said in a press release. The decrease was due to lower regasification revenue related to the early termination of the terminal use agreement between Sabine Pass LNG, LP and Chevron Corp., the company said.
Cheniere Partners declared a cash distribution of $1.03 per common unit to shareholders of record as of May 8, which includes a base amount of $0.775 and a variable amount of $0.255. The allocation takes into account annual debt amortization, capital allocation goals, expected capital expenditures to be financed with cash and cash reserves, among other factors.
According to the press release, Cheniere Energy is “pursuing liquefaction expansion opportunities and other projects along the LNG value chain.” The company’s Sabine Pass and Corpus Christi liquefaction facilities on the US Gulf Coast have a total production capacity of approximately 45 mtpa of LNG in operation and more than an additional 10 mtpa of planned production capacity under construction .
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