Cheniere Energy Inc.’s Corpus Christi Liquefaction LLC has secured its second foundation customer — Spain’s Endesa Generacion SA — for its liquefied natural gas (LNG) export terminal project on the Texas coast.

Corpus Christi Liquefaction signed a sale and purchase agreement (SPA) with Endesa for the latter to buy 1.5 million tonnes per annum (mtpa) of LNG once operations start at the terminal in Corpus Christi, TX. The project is being designed and permitted for up to three trains, with aggregate capacity of 13.5 mtpa.

“Endesa is a leading electric utility and major natural gas provider in Spain, and has significant operations throughout Latin America,” said Cheniere CEO Charif Souki. “We continue to work towards finalizing additional commercial agreements and are nearing completion of the regulatory process, having recently received our scheduling notice from the FERC. We expect to complete all necessary steps to reach a final investment decision and begin construction by early 2015.”

Endesa would buy LNG on a free on board (FOB) basis for a price indexed to the Henry Hub. The price is to be equal to $3.50/MMBtu plus 115% of the final settlement price for the New York Mercantile Exchange Henry Hub gas futures contract for the month in which the relevant cargo is scheduled, and 14% of the fixed portion of the contract sales price would be subject to an annual adjustment for inflation, Cheniere said in a regulatory filing to the Federal Energy Regulatory Commission (FERC). The SPA has a term of 20 years beginning with the first commercial delivery and an extension option of up to 10 years. Deliveries are expected to begin as early as 2018.

The first foundation customer contract was struck in December with Indonesian state-owned energy company PT Pertamina (Persero) (see Daily GPI, Dec. 6, 2013). The FOB contract has similar terms to the Endesa contract: $3.50/MMBtu plus 115% of the Henry Hub settlement; however 11.5% (not 14%) of the fixed portion is to be subject to an inflation adjustment.