Cheniere Marketing, a subsidiary of U.S.-based Cheniere Energy has inked a long-term sale and purchase agreement (SPA) to provide liquefied natural gas (LNG) to Galp Trading, an affiliate of Portuguese oil and gas company Galp Energia.
Under the 20-year deal, Galp will buy approximately 0.5 million tonnes per annum (mtpa) of LNG from Cheniere on a free-on-board (FOB) basis for a purchase price indexed to the Henry Hub price, plus a fixed liquefaction fee. Deliveries are envisaged to start in the early 2030s.
The Portuguese firm’s access to U.S. LNG is conditional upon, among other things, a positive final investment decision (FID) for the second train of the Sabine Pass Liquefaction (SPL) expansion project, called train eight, which is currently under development. Following the expansion of SPL, the terminal’s capacity is set to reach 20 mtpa of LNG.
Additionally, the Portuguese player agreed to buy a limited number of early cargoes from 2027 up to the start of the second train. According to Galp, this deal enables access to competitive U.S. volumes, adding flexibility and diversity to its portfolio.
“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,” noted Cheniere’s President and Chief Executive Officer, Jack Fusco.
“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.”
Apart from the activities at the LNG terminal, Cheniere recently witnessed the start of commercial operations of its 40-mile ADCC pipeline. Designed to transport up to 1.7 billion cubic feet per day (Bcf/d), expandable to 2.5 Bcf/d of LNG, the pipeline connects Whistler Pipeline’s Agua Dulce Header and Corpus Christi LNG facility in Texas.
Sabine Pass is home to another LNG project, co-developed by ExxonMobil and QatarEnergy – the Golden Pass LNG (GPX) export terminal. The project recently hit a snag as one of the lead contractors filed for bankruptcy. It remains to be seen if the project startup, scheduled for next year, will be affected by this.
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