HOUSTON, Jan. 26, 2012 /PRNewswire/ -- Cheniere Energy Partners, L.P. ("Cheniere Partners") (NYSE Amex: CQP) announced today that its subsidiary, Sabine Pass Liquefaction, LLC ("Sabine Liquefaction"), has entered into an amended and restated liquefied natural gas ("LNG") sale and purchase agreement (the "SPA") with BG Gulf Coast LNG, LLC ("BG"), a subsidiary of BG Group plc, under which BG has agreed to purchase an additional 2.0 million tonnes per annum ("mtpa") of LNG, bringing BG's total annual contract quantity to 5.5 mtpa of LNG. BG will purchase 3.5 mtpa of LNG with the commencement of train one operations and will purchase a portion of the additional 2.0 mtpa of LNG as each of trains two, three and four commence operations.
Under the SPA, the purchase terms essentially remain the same, whereby BG will pay Sabine Liquefaction a fixed sales charge for the contracted quantity and will pay a contract sales price for LNG purchases based on the applicable Henry Hub index traded on the New York Mercantile Exchange, with the exception that the fixed sales charge will increase ratably in order to account for the increased fixed sales charge on the additional volumes.
Sabine Liquefaction is developing a liquefaction project at the Sabine Pass LNG terminal in the Gulf Coast region of the U.S. that is expected to include four liquefaction trains capable of producing up to 18 mtpa of LNG. To date, Sabine Liquefaction has entered into three LNG sale and purchase agreements, including the agreement with BG for 5.5 mtpa, an agreement with Gas Natural Fenosa for 3.5 mtpa that commences with the start of train two operations and an agreement with GAIL (India) Limited for 3.5 mtpa that commences with the start of train four operations. Sabine Liquefaction expects to sell an additional 3.5 mtpa of LNG under an agreement that would commence with the start of train three operations, which would bring total contracted volumes to 16.0 mtpa or approximately 90 percent of total expected LNG volumes.
"In assessing the optimal contracting strategy for the Sabine Liquefaction Project, we have decided to sell part of the additional volumes on a long-term basis to BG, our first foundation customer," said Charif Souki, Chairman and CEO. "There's a trade-off in whether we sell the additional volumes on a long-term basis or in the open market. Contracting a portion of the additional volumes adds further certainty to the long-term cash flows of the project and preserves the opportunity for additional upside."
BG Group plc is a world leader in natural gas, with a strategy focused on connecting competitively priced resources to specific, high-value markets. Active in more than 25 countries on five continents, BG Group has a broad portfolio of exploration and production, LNG and transmission and distribution business interests. It combines a deep understanding of gas markets with a proven track record in finding and commercializing reserves. For further information visit: http://www.bg-group.com .