Cheniere Energy Inc. stock shot up nearly 45% Tuesday after Total LNG USA Inc. and an affiliate of ChevronTexaco Global Gas reported they signed separate 20-year agreements with Cheniere subsidiary, Sabine Pass LNG LP, to buy a total of 1.7 Bcf/d of regasification capacity at the company’s proposed liquefied natural gas (LNG) receiving terminal on the Gulf Coast in Cameron Parish, LA.
Total LNG USA, a unit of French-based Total SA, exercised its option to acquire 1 Bcf/d of regasification capacity at the proposed 2.6 Bcf/d facility, while a ChevronTexaco Global Gas affiliate signed an initial deal for 700 MMcf/d of capacity at the Sabine Pass LNG project. Total took initial steps in September to enter into the deal for service at the terminal starting no later than April 1, 2009 (see Daily GPI, Sept. 7).
The ChevronTexaco and Total agreements came only a day after Cheniere announced it signed financing agreements with HSBC Securities (USA) Inc. and SG Corporate & Investment Banking, an arm of Societe Generale, for the $741 million debt component of the project financing for the construction of the Sabine Pass facility (see Daily GPI, Nov. 9).
Cheniere Energy stock on Tuesday climbed $11.76 a share on the American Exchange to close at $37.97, up from $26.21 at the end of Monday.
“Total’s commitment at Sabine completes the commercial foundation for the project and keeps us on track to begin construction early next year,” said Keith Meyer, president of Cheniere LNG Inc., a wholly owned subsidiary of Houston-based Cheniere Energy. With the deal, Cheniere “[will] have the opportunity to be a significant part of Total’s growing North American natural gas presence.”
Total estimated it had equity sales of 7 million metric tons of LNG in 2003. It has interests in six liquefaction plants worldwide and holds interests in three LNG regasification terminal projects in Mexico, India and souther France.
In addition to acquiring regasification capacity, the ChevronTexaco Global Gas affiliate reported it has the option to obtain a 20% limited partner interest in the Sabine Pass LNG project, but no other details were disclosed.
“ChevronTexaco’s strategy is to create a high-impact global gas business by commercializing our undeveloped natural gas resources through gaining access to North American and Asian markets, said John Gass, president of ChevronTexaco Global Gas.
“This agreement is a key element in our plans to pursue multiple LNG terminal opportunities to give us flexibility in delivering reliable and affordable supplies of clean natural gas into North America,” he noted. ChevronTexaco is one of the world’s largest producers and marketers of natural gas, producing approximately 4 Bcf/d.
FERC issued a draft environmental impact statement in August for the proposed Sabine Pass LNG terminal, which would be located on the Texas-Louisiana border not far from the Henry Hub. The project would have a send-out capacity of 2.6 Bcf/d, and would include three 160,000 cubic meter storage tanks. The in-service date is targeted for late 2007.
ChevronTexaco said last month that it will delay initial service from its own two proposed LNG import terminals, the Port Pelican terminal to be located 40 miles offshore Louisiana in Vermilion Block 140 and its Terminal GNL Mar Adentro, located offshore Baja California Norte. Both projects had been planned for service in 2007, but now the company is projecting in-service dates later this decade to coincide with the operation of upstream liquefaction projects (see Daily GPI, Oct. 19).
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