Cheniere Energy has reached a major milestone that will allow it to begin negotiating new contracts to export liquefied natural gas from Corpus Christi.
The Houston-based owner of the Sabine Pass LNG terminal, which is under construction in Louisiana, said in a regulatory filing Friday that it had received a price tag for another planned terminal project in Corpus Christi.
Engineering firm Bechtel, which is building liquefaction facilities at the Sabine Pass terminal, gave Cheniere a contract price in September for construction of its planned terminal in Corpus Christi. The contract equates to about $800 per ton of liquefaction capacity, a figure that Cheniere had previously anticipated. The contract pegs the total cost of a facility in Corpus Christi, including financing costs, at about $12 billion.
The step will allow Cheniere to begin negotiating contracts with overseas buyers of natural gas, because it can now incorporate the project’s costs.
“This allows them to start to market that facility,” said Connie Hsu, an analyst for investment research firm Morningstar. “Now that they know how much it’s going to cost to build the whole thing, they know what to charge to get a decent return.”
Cheniere’s planned second export terminal in Corpus Christi, where it will be able to store about 11 billion cubic feet of the natural gas it liquefies, will allow it to ship more natural gas overseas.
Cheniere’s Sabine Pass facility was the first to receive approval from the U.S. Department of Energy to ship natural gas to countries with which the U.S. doesn’t have free trade agreements. The company is seeking permits to export gas from additional facilities planned at Sabine Pass, and from Corpus Christi.