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Cheniere Energy (CQP) Signs LNG Agreement With TOTAL (TOT)

 December 17, 2012 09:44 AM

(By Balachander) Cheniere Energy Partners LP (NYSEAMEX: CQP) and France-based TOTAL S.A. (NYSE: TOT) have signed a 20-year liquefied natural gas (LNG) agreement for exports of LNG from Sabine Pass terminal in Louisiana.

Under the terms of the agreement, whose financial terms weren't disclosed, Total has agreed to purchase 91,250,000 MMBtu of LNG annually plus 13,500,000 MMBTU of seasonal LNG volumes upon the commencement of train five operations.

"Total, one of our longstanding customers at Sabine Pass, will become the next foundation customer for LNG exports as Sabine Liquefaction further expands its liquefaction project," said Cheniere chief executive Charif Souki.

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These volumes represent around 2.0 million tonnes per annum (mtpa) of roughly 4.5 mtpa of nominal capacity of train five being developed at Sabine Liquefaction, Cheniere said.

Total will purchase LNG on an FOB basis, under which LNG will be loaded onto Total's vessels, for a purchase price indexed to the monthly Henry Hub price plus a fixed component. 

The agreement has a term of twenty years commencing upon the date of first commercial delivery for train five, and an extension option of up to ten years. 

Cheniere expects deliveries from train five to occur as early as 2018.

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The Sabine Pass LNG terminal has regasification and send-out capacity of 4.0 billion cubic feet per day (Bcf/d) and storage capacity of 16.9 billion cubic feet equivalent (Bcfe). 

Cheniere Energy shares rose 1.29 percent to trade at $20.48 on Monday. U.S.-listed shares of Total added 0.77 percent to trade at $51.25.

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