NEW YORK Cheniere Energy Partners LP has signed a liquefied natural gas (LNG) supply deal with British energy firm Centrica Plc.
Houston-based Cheniere will ship 1.75 million tonnes of LNG to Centrica annually under the agreement, with first commercial delivery set for September 2018, Centrica said.
LNG exports have been touted as a boon to the domestic steel tube and pipe industry, as they could boost floundering prices for natural gas and subsequently increase drilling (amm.com, Feb. 4).
The 20-year contract between Cheniere and Centrica, which allows for a 10-year extension, will be indexed to the Henry Hub natural gas price plus a fixed component.
"Future gas supplies from the U.S. will help diversify our energy mix and provide British consumers with a new long-term, secure and affordable source of fuel," Prime Minister David Cameron said in a statement.
However, Windsor, England-based Centrica cautioned that "the contract is subject to ... Cheniere receiving the necessary regulatory approvals, securing finance, making a final investment decision and issuing a notice to proceed with the fifth LNG train" at its LNG export project in Louisiana.
The company is retooling its Sabine Pass LNG terminal in Louisiana to handle exports, with construction on Train 1 and Train 2 kicking off in the third quarter last year, according to the companys website.