Cheniere and Korea Southern Power Sign Long-Term LNG Deal
The deal is expected to support the LNG exporter’s Sabine Pass liquefaction expansion project.
Cheniere Energy and Korea Southern Power (KOSPO) announced a new sale and purchase agreement (SPA), under which KOSPO will buy 0.4 mtpa from Cheniere Marketing from 2027 through 2046.
A smaller annual quantity of LNG is to be delivered starting in 2024. The purchase price for LNG to be delivered under the SPA prior to 2027 will be a market-based price, after which the purchase price will be indexed to the Henry Hub price, plus a fee, according to the Houston-based LNG exporter.
“We are pleased to enter into this long-term LNG contract with KOSPO, the leading power generation company in Korea, in support of KOSPO’s growing natural-gas-fired power generation capacity,” said Jack Fusco, Cheniere’s president and chief executive.
“This SPA is expected to support the SPL Expansion Project, and we are excited to build commercial momentum as the project’s development progresses. This SPA further highlights Cheniere’s leadership in providing flexible, cleaner burning energy supply to meet both the energy security needs and environmental goals of our customers in both the short and long term,” he said.
The volumes of LNG associated with the SPA from 2028 through 2024 are subject to a positive final investment decision of the first train of the liquefaction facility’s expansion project.
The Sabine Pass LNG terminal, located in Cameron Parish, Louisiana, first came online in 2016. The facility comprises six liquefaction trains with a total production capacity of about 30 mtpa of LNG. The terminal also has operational regasification facilities that include five LNG storage tanks, vaporizers, and three marine berths.
The Sabine Pass liquefaction expansion project includes up to three natural gas liquefaction trains with an expected total production capacity of approximately 20 mtpa of LNG. In February 2023, Cheniere initiated a prefiling review process with the Federal Energy Regulatory Commission (FERC) under the National Environmental Policy Act.
The company is targeting project construction to begin in the fourth quarter of 2025, with a full project in-service date expected for the second half of 2032, according to its filing documentation with FERC.