South Korea’s KOSPO to buy LNG from Cheniere

South Korea’s KOSPO is the Asian buyer behind a long-term LNG deal Cheniere revealed earlier this month.

Cheniere’s CEO Jack Fusco announced on May 2 during the company’s first-quarter earnings call that its unit Cheniere Marketing had signed the long-term LNG sales and purchase agreement with an Asian firm and related to the planned expansion of its Sabine Pass facility in Louisiana.

Fusco did not reveal the name of the buyer but said that Cheniere will supply about 0.4 million tonnes per year under the deal for over 20 years.

In a statement issued on Tuesday, the US LNG exporting giant said that Korea Southern Power, or KOSPO, has agreed to buy 0.4 mtpa of LNG from Cheniere Marketing on a delivered ex-ship (DES) basis from 2027 through 2046, with a smaller annual quantity to be delivered starting in 2024. 

Cheniere said 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.

Sabine Pass expansion

The firm said that the volumes associated with the SPA from 2028 through 2046 are subject to a positive final investment decision with respect to the first train of the Sabine Pass liquefaction expansion project.

Sabine Pass currently has a capacity of about 30 mtpa following the launch of the sixth train in February last year, while Cheniere’s three-train Corpus Christi plant in Texas can produce about 15 mtpa of LNG and is already undergoing expansion.

In February this year, Cheniere initiated the pre-filing review process with the US FERC for the proposed Sabine Pass Stage 5 expansion project.

The project will include up to three large-scale liquefaction trains, each with a production capacity of about 6.5 mtpa of LNG, a boil-off-gas (BOG) re-liquefaction unit with a production capacity of 0.75 mtpa of LNG, and two 220,000-cbm LNG storage tanks.

“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,” Fusco said.

“This SPA is expected to support the SPL expansion project, and we are excited to build commercial momentum as the project’s development progresses,” he said.

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