Cheniere Energy Partners, L.P. ("Cheniere Partners") (NYSE MKT: CQP) announced today that its subsidiary, Sabine Pass Liquefaction, LLC ("Sabine Liquefaction"), has entered into a liquefied natural gas ("LNG") sale and purchase agreement ("SPA") with Centrica plc ("Centrica") under which Centrica has agreed to purchase 91,250,000 MMBtu of annual LNG volumes upon the commencement of Train 5 operations. These volumes represent approximately 1.75 million metric tons per annum ("mmtpa"), which together with the previously announced SPA with Total Gas & Power North America, Inc. ("Total") brings the total contracted volume to commence with Train 5 operations to 3.75 mmtpa. Sabine Liquefaction now has commercial contracts for five trains.
Sabine Liquefaction is currently developing six liquefaction trains, each with expected nominal capacity of approximately 4.5 mmtpa, adjacent to the Sabine Pass LNG terminal. Sabine Liquefaction has commenced construction of the first two trains and expects to commence construction of the third and fourth trains in the first half of 2013. The permitting process and preliminary engineering have been initiated for the fifth and sixth trains.
Under the SPA, Centrica will purchase LNG on an FOB basis, under which LNG will be loaded onto Centrica's vessels, for a purchase price indexed to the monthly Henry Hub price plus a fixed component. The SPA has a term of twenty years commencing upon the date of first commercial delivery for Train 5, and an extension option of up to ten years. Deliveries from Train 5 are expected to occur as early as 2018. The SPA is subject to certain conditions precedent, including but not limited to Sabine Liquefaction receiving regulatory approvals for Train 5, securing necessary financing arrangements, making a final investment decision, and issuing a notice to proceed for Train 5.
"Centrica is an excellent addition to our customer group, becoming our sixth customer to contract for LNG exports at Sabine Liquefaction," said Charif Souki, Cheniere's Chairman and CEO. "Centrica serves over 11 million households in Britain – nearly half of the country's homes. With this contract, exports from the United States will become an important part of the UK's overall energy supply portfolio." Souki continued, "In February 2013 we began the mandatory NEPA pre-filing process with FERC for trains five and six, and we anticipate filing the full application as early as September of this year. In addition, we submitted an application to the DOE last month for FTA and Non-FTA licenses for exports under the Total SPA. We intend to file the license applications for exports under the Centrica SPA in the upcoming weeks."
Centrica is a top 30 FTSE 100 integrated energy company operating predominantly in the UK and North America. Upstream Centrica sources, generates, processes, trades and stores energy. Downstream Centrica supplies gas and electricity to millions of homes and businesses and offers a range of home energy solutions and low carbon products and services. Businesses include British Gas, which serves around 12 million homes in Britain, nearly half of the country's homes, as well as providing energy to one million UK businesses and Direct Energy, which has businesses in natural gas production, power generation and distribution in North America. For further information, go to www.centrica.com.