HOUSTON — A Cheniere Energy subsidiary has agreed to a 20-year deal worth $5.6 billion to supply liquefied natural gas to Spanish power and generation company Iberdola, S.A., the companies announced Friday.
Iberdola agreed to purchase 400,000 metric tons annually from Cheniere’s planned Corpus Christi facility once its liquefaction Train 1 comes online. That rate doubles once the facility’s Train 2 come online. The facility is slated to have a total of three trains. Once completed, Iberdrola’s commitment would equal about 6 percent of the facility’s capacity.
Iberdola officials said it would use the natural gas to supply its markets in the UK and Spain
Cheniere Chairman and CEO Charif Souki said in a statement that Iberdrola is the first “foundation customer” of the plant’s Train 2.
He said Cheniere the is getting close to the point of breaking ground on the facility. “We expect to complete all necessary steps to reach a final investment decision and begin construction by early 2015,” he said in a statement. Cheniere has already begun construction on its Sabine Pass LNG facility but is also pursuing a liquefaction project near Corups Christi. The company believes it could start exporting LNG from the Corpus Christi project as early as 2018.
The deal will last 20 years beyond the first shipment of gas from Train 2 — around 2019 — with an option for another 10 years.
The Corpus Christi project still does not have all of its regulatory approval, and Cheniere has not yet made its final investment decision to construct Train 2.
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