Cheniere, Woodside sign 20-year LNG sale and purchase agreement
PERTH, Australia -- Woodside Energy Trading Singapore Pte Ltd, a subsidiary of Woodside Petroleum, has signed a binding LNG Sale and Purchase Agreement with Cheniere Energy, Inc. subsidiary, Corpus Christi Liquefaction, LLC.
Under the agreement Woodside will purchase approximately 0.85 mtpa of LNG from the Corpus Christi Liquefaction Project on start up of the second train at the LNG export facility being developed near Corpus Christi, Texas. The Corpus Christi Liquefaction Project is planned to include up to three LNG trains with a combined production capacity of 13.5 mtpa.
LNG will be purchased on a free on board basis. The price payable by Woodside will be 115% of the monthly Henry Hub price plus $3.50 per MMBtu, in line with contracts signed with the other buyers from the Corpus Christi LNG Project.
The twenty-year agreement includes an extension option of up to an additional ten years and a mechanism that gives Woodside the option to forgo deliveries with sufficient notice through the payment of $3.50 per MMBtu for cancelled quantities. Cargoes to Woodside from Train 2 are expected to start in 2019.
Woodside CEO Peter Coleman said that the agreement with Corpus Christi Liquefaction, complemented Woodside’s existing portfolio by providing a new product source that diversified Woodside’s LNG product offering.
“This agreement is a demonstration of how we are extending and enhancing our marketing and trading capabilities and adding value to the portfolio,” Coleman said.
“From a geographic, pricing and specification perspective we expect this U.S. LNG to be attractive to LNG purchasers, complement our existing LNG portfolio and allow us to exploit new opportunities.”
The agreement is subject to certain conditions precedent, including Corpus Christi Liquefaction receiving regulatory approvals, securing necessary financing arrangements and making a final investment decision to construct the second train of the Corpus Christi Liquefaction Project.