Galp signs deal with Cheniere for US LNG

Galp has signed a sales and purchase agreement with Cheniere Marketing (Cheniere) for access to US LNG.

It includes a 20-year 0.5 mtpa delivery contingent to final investment decision (FID) of the second train of Sabine Pass Liquefaction Expansion Project, currently under development.

The agreement also includes access to a limited number of early cargoes, from 2027 and up to the start of the second train. Galp’s volumes will be purchased on a FOB basis and priced indexed to Henry Hub plus a fixed liquefaction fee.

“This agreement further enhances Galp’s LNG sourcing basket with access to competitive US volumes, adding flexibility and diversity to its portfolio,” according to a statement.

Cheniere Energy operates one of the largest liquefaction platforms, with approximately 45 Mtpa of LNG in operation, and an additional 10-plus Mtpa of expected capacity under construction.

The Sabine Pass expansion project will feature two large-scale liquefaction trains, each with nameplate capacity of 7 Mtpa, and maximum production capacity of 8.43 Mtpa, as well as two full-containment LNG storage tanks with 220,000 cbm capacity, and loading capabilities.

Cheniere forecasts around 135 Mtpa of additional supply will be needed to meet expected demand after 2027, but many commentators are warning of an LNG supply glut.

Source: gasworld