Cheniere Energy, Inc. has announced that its subsidiary, Cheniere marketing, LLC, has entered into a long-term liquefied natural gas sale and purchase agreement with Galp Trading S.A., a subsidiary of Galp Energia, SGPS, S.A.
Under the terms of the SPA, Galp will purchase approximately 0.5 million tonnes per annum of LNG for a duration of 20 years from Cheniere marketing on a free-on-board basis. The purchase price will be indexed to the Henry Hub price, plus a fixed liquefaction fee. Deliveries are slated to commence in the early 2030s, contingent upon a positive final investment decision regarding the second train of the Sabine Pass Liquefaction Expansion Project. The agreement also includes provisions for a limited number of early cargoes to be purchased by Galp prior to the commencement of Train Eight.
Jack Fusco, president and chief executive officer of Cheniere, expressed satisfaction with the agreement, stating, “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. 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 aims to develop up to approximately 20 mtpa of LNG capacity, inclusive of estimated debottlenecking opportunities. In February 2024, certain subsidiaries of Cheniere Energy Partners, L.P. submitted an application to the Federal Energy Regulatory Commission for authorisation to site, construct, and operate the SPL Expansion Project. Additionally, an application was submitted to the Department of Energy requesting authorization to export LNG to Free-Trade Agreement and non-FTA countries.
This strategic agreement with Galp highlights the growing significance of US natural gas in Europe’s energy landscape and supports the advancement of Cheniere’s expansion projects, ensuring a stable supply of cleaner energy for the future.
For more information visit www.cheniere.com
