Cheniere Energy has marked the start of its 20-year Sales and Purchase Agreement (SPA) to supply U.S.-sourced LNG to Korea Gas Corporation (KOGAS) from the Sabine Pass Liquefaction facility in Louisiana.
The SPA, which was originally signed in January of 2012, officially commenced on June 1, 2017, with the first cargo loading the following day.
Under the terms of the SPA, Cheniere shall sell and make available for delivery to KOGAS approximately 3.5 million tonnes of LNG per year, which represents more than 10 percent of South Korea’s total annual demand.
“KOGAS is an ideal commercial partner as one of the largest buyers of LNG in the world and serves South Korea, an important economic and national ally of the United States,” said Jack Fusco, President and CEO of Cheniere.
“This long-term LNG SPA with Cheniere Energy will contribute significantly to improving the trade balance between the United States and Korea. Plus, the destination-free US LNG will greatly increase the flexibility and efficiency in the global LNG market,” KOGAS president & CEO Seung-Hoon Lee said.
In February 2016, Cheniere became the first company to ship LNG from the contiguous United States in over 50 years, and is currently the only exporter of U.S. LNG.
The Sabine Pass LNG site can accommodate up to six liquefaction trains capable of processing over 3.5 Bcf/d of natural gas. The production capacity of each LNG train is being designed for approximately 4.5 mtpa, according to Cheniere.
Three trains have been completed, and construction has commenced on the fourth and fifth train, with all regulatory approvals secured for Train 6. For the first five LNG trains, 19.75 of the 22.5 mtpa nominal production capacity (approximately 88%) has been contracted to third party.