Cheniere secures buyers for two Corpus Christi LNG trains

HOUSTON — The Houston company due to be the first exporter of U.S. natural gas has lined up buyers for more than half of the supplies it plans to send overseas from its proposed liquefaction facility in Corpus Christi.

Cheniere Energy said Tuesday it has inked several 20-year contracts since December to sell 6.9 million metric tons of liquefied natural gas per year from its first two gas-cooling units at its planned $12 billion project in southeast Texas.

Its latest deal, announced Tuesday, would provide 760,000 metric tons of LNG per year to Indonesia’s state-owned energy company Pertamina for two decades, starting as early as 2019. Pertamina was the first buyer to sign up for Cheniere’s Corpus Christi LNG supplies, in December, after Indonesia — historically an LNG exporter — decided to switch one of its export facilities to an import facility.

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That’s on top of another deal this week, announced Monday, with Australian oil and gas producer Woodside Petroleum. Cheniere agreed to supply Woodside with 850,000 metric tons of gas per year for 20 years beginning in 2019.

The Houston LNG supplier has no shortage of international interest in the first exports of U.S. gas, which has become cheap and abundant after a surge in shale gas production.

It has already found buyers for 19.8 million metric tons of LNG from its facilities at the Sabine Pass in Louisiana, the nation’s first facility permitted to sell gas to eager customers in non-Free Trade Agreement countries.

Global impact

The advent of U.S. gas exports is stalling some traditional suppliers in their plans to build competing LNG projects in east Africa, Russia and elsewhere as buyers become more tight-fisted, said Benjamin Gage, a global gas and LNG analyst at research firm IHS.

“LNG buyers have never had such a capital-light option in the market’s history,” Gage said. “There’s an unquantified amount of U.S. LNG coming to market, and buyers know they don’t have to be as aggressive on pricing.”

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All told, Cheniere’s Corpus Christi facility would be able to produce 13.5 million metric tons of liquefied gas per year, if it builds three gas-liquefying facilities known as LNG trains.

So far, the firm’s second LNG project, which may begin operations as early as 2018, has drawn buyers from Spain, Indonesia and Australia.

The company expects to make a final investment decision to OK the project and begin building it by early 2015, Cheniere chairman and CEO Charif Souki said in a written statement Tuesday.

Cheniere shares increased $1.36 in early trading Tuesday to $73.06 on the New York Stock Exchange.


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