Cheniere Energy Partners LP has taken another step toward adding a natural gas liquefaction facility at its Cameron Parish terminal with an announcement Wednesday of a long-term contract to sell liquefied natural gas to a British firm that is one of the largest buyers of the fuel worldwide.
The 20-year contract calls for Cheniere Energy subsidiary Sabine Pass Liquefaction LLC to sell up to 3.5 million tons of LNG per year to BG Group plc subsidiary BG Gulf Coast LNG LLC.
BG will be “a strong foundation customer” for the Sabine Pass liquefaction project, Cheniere Chairman and Chief Executive Officer Charif Souki said in a news release. He described the contract as a significant milestone for the project.
The liquefaction facility’s cost is estimated at $6 billion.
Last week, Patricia Outtrim, Cheniere’s vice president of governmental and regulatory affairs, said Cheniere plans to use long-term contracts for the facility to secure the financing for the project.
The company already has a U.S. Department of Energy permit to export LNG and expects to receive the other required permits shortly, Outttrim had said. She was one of the speakers at the LSU Center for Energy Studies’ annual energy summit.
Cheniere has already spent $1.5 billion on the facility, which was planned in the 1990s, to handle imports of liquefied natural gas.
At the time, domestic natural gas prices were double and triple the current price of around $4 per thousand cubic feet.
Cheniere said it expects to begin construction in 2012 and that exports of LNG could begin as early as 2015.