Cheniere Energy Partners LP unit Sabine Pass Liquefaction LLC is in talks to export liquefied natural gas (LNG) from the United States to the Dominican Republic, Cheniere said. It's the latest announcement of LNG export discussions by the company as it seeks to develop gas liquefaction capability at an existing import terminal in Louisiana.

Sabine has signed memoranda of understanding with Empresa Generadora de Electricidad Haina SA (EGE Haina) and Compania de Electricidad de San Pedro de Macoris (CESPM), both managed by Basic Energy. Basic intends to buy up to 0.6 million metric tons of LNG per year.

The Dominican Republic is a free-trade nation, and Sabine has received approval from the U.S. Department of Energy to export LNG to nations with free-trade status.

Basic and Sabine agreed to discuss agreements whereby Basic would purchase LNG for receipt at its designated receiving terminal(s) on a delivered ex-ship basis (DES). The agreements would be subject to conditions, including Sabine's receipt of regulatory approvals and making a final investment decision to construct liquefaction facilities at its existing import terminal.

Cheniere Partners owns 100% of the Sabine Pass LNG terminal in western Cameron Parish, LA, on the Sabine Pass Channel. Previously Sabine has announced talks with Japan's Sumitomo Corp. (see Daily GPI, Jan. 28), EDF Trading, (see Daily GPI, Jan. 21), as well as entities in Spain and China (see Daily GPI, Nov. 30, 2010).

"Basic Energy operates several power plants in the Dominican Republic and is seeking to optimize its power portfolio by focusing on natural gas as an alternative, more economical and environmentally friendly fuel source," said Cheniere Partners CEO Charif Souki. "They are a great example of the emerging markets we are targeting for LNG sales, where natural gas is being sought out by power producers to replace fuel oil for dual-fuel plants in order to reduce power generating costs and reduce emissions. If the gas is sourced based on an indexation to Henry Hub prices, this can also result in significant cost savings for these power producers."

EGE Haina is the largest single power generator formed out of the privatization of the Dominican Republic power sector in 1999, Sabine said. CESPM is said to be the the country's largest independent power producer. Both companies are substantially operated by Basic Energy. Their combined portfolio includes more than 880 MW of installed capacity throughout the country consisting of dual-fuel, coal and natural gas plants.

Separately, Freeport LNG and Macquarie Energy have said they will develop export capability on the site of Freeport's existing import terminal in Texas. Macquarie Energy is the North American energy marketing and trading arm of Australia's Macquarie Group (see Daily GPI, Nov. 23, 2010).

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