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Cheniere marketing unit signs sales deal with Austria's OMV

Houston (Platts)--6 Dec 2017 540 pm EST/2240 GMT


Cheniere Energy's marketing unit has secured a multi-year sales deal with the trading arm of Austrian energy company OMV to deliver LNG cargoes to Europe, Cheniere said Wednesday.

Meanwhile, another Gulf Coast export project under development is nearing final investment decision.

Details about the agreement between Cheniere Marketing and OMV, including pricing and duration, were not being released, Cheniere spokesman Eben Burnham-Snyder said in an email responding to questions.

Europe and Asia are key markets for Cheniere as it adds liquefaction units, or trains, at its Sabine Pass export terminal in Louisiana and works to complete construction at its Corpus Christi, Texas, export facility.

OMV produces and markets oil and natural gas. It also is involved in petrochemicals and refining. According to the company's website, OMV operates a gas pipeline network in Austria and gas storage facilities in Austria and Germany.

In August 2015, Cheniere Marketing signed a similar deal with France's EDF. That sales arrangement called for delivery of up to 26 cargoes (approximately 100 MMcf/d) on Delivered Ex-Ship terms to the Dunkirk terminal through 2018. The sale price was indexed to the Dutch Title Transfer index, or TTF, with a cancellation clause written into the contract.

Cheniere regulatory filings at the time stated that the variable SPA with Cheniere Marketing allowed them to purchase any LNG produced by Sabine Pass in excess of that required for other customers at "Cheniere Marketing's option" for a fee of $3/MMBtu.

Cheniere Marketing owns the right to liquefy any excess, uncontracted capacity available at the Sabine Pass and Corpus Christi LNG export facilities. Platts Analytics' Bentek Energy estimated at the time of the EDF deal that that amounted to around 800 MMcf/d of potential capacity split between the seven trains under development at the two facilities.

Sabine Pass currently has four trains in operation and a fifth under development. Cheniere has two trains under development at Corpus Christi. A sixth train at Sabine Pass and a third train at Corpus Christi have been proposed subject to commercialization.

Currently, Cheniere is the only US exporter of LNG produced from shale gas. Dominion Energy will be the second when its Cove Point terminal in Maryland ships its first cargo in the coming days or weeks; it began introducing feedgas to the facility on Tuesday. Several US LNG export projects are under construction and more than a dozen others are being proposed.

NextDecade is among the second wave of developers. An executive reiterated Wednesday that the company wants to make a final investment decision on its Rio Grande LNG export terminal project in Brownsville, Texas, by the end of 2018 so it can begin shipments in 2023.

"Customer engagement has ramped up materially from earlier in 2017 to where we are today," NextDecade President Matt Schatzman said at a Wells Fargo Securities energy industry conference in New York that was webcast. "We have been talking to quite a few customers. We've been engaged with them in Asia, as well as Europe."

--Harry Weber, harry.weber@spglobal.com

--Edited by Richard Rubin, richard.rubin@spglobal.com




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