BG Group signs long-term US LNG purchase agreement – 26 October 2011
Oct 26, 2011
OTC Disclosure News Service
Reading, United Kingdom –
BG Group announced today that it has signed a fully-termed sale and purchase agreement with Sabine Pass Liquefaction, LLC, a subsidiary of Cheniere Energy Partners, L.P., for the purchase of 3.5 million tonnes per annum (mtpa) of liquefied natural gas (LNG) over a 20-year period from the Sabine Pass LNG terminal located in Louisiana, USA.
The agreement, which is subject to certain conditions and approvals, is the first long-term LNG purchase agreement from a project on the US Gulf Coast, allowing BG Group to secure LNG volumes for export from the US to international gas markets. LNG exports are expected to commence as early as 2015.
Construction of the liquefaction facilities at Sabine Pass is expected to commence in 2012, with the initial phase to consist of two trains capable of producing up to 9 mtpa of LNG. BG Group is not an investor in the proposed liquefaction facilities.
BG Group Chief Executive Sir Frank Chapman said: “This is a ground-breaking agreement for BG Group, giving us first-mover advantage in securing LNG export volumes from the US Gulf Coast. It is the first agreement of its kind in this region and it secures us early access to the rapidly emerging commercial opportunities driven by the recent material increases in US gas reserves.
“We are delighted to have signed this landmark deal for BG Group in a market and a country where we have been intimately involved, throughout the gas chain, for a decade. It adds further diversity to our global LNG supply portfolio and builds upon our proven track record in capturing and developing new opportunities that continue to drive the global growth of our LNG business”.
BG Group is continuing to pursue an expansion of the Lake Charles LNG terminal, located in Louisiana, USA, to provide natural gas liquefaction services. Authorisation has been received from the US Department of Energy (DOE) to export up to 730 Bcf of natural gas per year (approximately 15 mtpa) from the Lake Charles LNG terminal to countries that have a free trade agreement in place with the US. The DOE is currently reviewing an application to export natural gas from the Lake Charles LNG terminal to countries that do not have a free trade agreement with the US.
Notes to Editors:
BG Group plc (LSE: BG.L) is a world leader in natural gas, with a strategy focused on connecting competitively priced resources to specific, high-value markets. Active in more than 25 countries on five continents, BG Group has a broad portfolio of exploration and production, Liquefied Natural Gas (LNG) and transmission and distribution business interests. It combines a deep understanding of gas markets with a proven track record in finding and commercialising reserves. For further information visit: www.bg-group.com
Cheniere Energy Partners, L.P. (NYSE: CQP) is a Delaware master limited partnership that owns
100 percent of the Sabine Pass LNG terminal located in western Cameron Parish, Louisiana, USA on the Sabine Pass Channel. The terminal has sendout capacity of 4.0 bcfd and storage capacity of 16.9 Bcfe. The US Department of Energy has authorised exports from the Sabine Pass LNG terminal of up to 803 billion cubic feet of natural gas per year (approximately 16 mtpa).
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There are matters set out within this announcement that are forward-looking statements. Such statements are only predictions, and actual events or results may differ materially. For a discussion of important factors which could cause actual results to differ from these forward-looking statements, refer to BG Group’s Annual Report and Accounts for the year ended 31 December 2010. BG Group does not undertake any obligation to update publicly, or revise, forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent legally required.
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