Summary
Cheniere Energy, Inc. (CEI) announced a significant long-term agreement with Électricité de France, S.A. (EDF) for the sale and purchase of liquefied natural gas (LNG). This agreement, executed by CEI's subsidiary Corpus Christi Liquefaction, LLC (CCLNG), involves the supply of LNG from the third liquefaction train at the CCLNG facility. This deal is crucial for investors as it secures a substantial customer for Cheniere's expansion projects. The contract spans 20 years, with an option for an additional 10 years, and includes annual contract quantities and provisions for bridging volumes. The pricing mechanism is tied to the Henry Hub natural gas futures contract, providing a clear revenue stream for Cheniere and a predictable cost for EDF. The agreement is contingent on several conditions, including regulatory approvals, financing, and a final investment decision for the third liquefaction train, making the successful progression of these milestones key for the realization of this agreement's full value.
Key Highlights
- 1Cheniere Energy subsidiary (CCLNG) signed a 20-year LNG Sale and Purchase Agreement (SPA) with Électricité de France, S.A. (EDF).
- 2The SPA is for LNG from the third liquefaction train at the Corpus Christi Liquefaction (CCL) facility.
- 3The agreement includes an annual contract quantity of 40,000,000 MMBtu (approx. 0.77 mtpa).
- 4Bridging volumes of 20,000,000 MMBtu per contract year will be provided from the second liquefaction train.
- 5The contract sales price is $3.50 plus 115% of the monthly Henry Hub natural gas futures settlement price, with inflation adjustment for a portion of the fixed fee.
- 6The SPA commencement and CCLNG's obligation for the third liquefaction train are subject to several conditions, including regulatory approvals, financing, and a final investment decision.
- 7EDF has the right to suspend deliveries by providing advance notice, while still being obligated to pay the fixed portion of the contract sales price for suspended quantities.