A subsidiary of Paris-based E&P giant Total has signed a 20-year agreement with Cheniere Energy Inc. for 1 Bcf/d of regasification capacity at the proposed Sabine Pass, LA, liquefied natural gas (LNG) import terminal, which received a favorable draft environmental review by the Federal Energy Regulatory Commission last month (see NGI, Aug. 16).

Under the terms of the agreement, Total, a major international LNG producer, will receive the right to LNG regasification capacity for 20 years starting on April 1, 2009. The Sabine Pass terminal, which will be located near the Texas-Louisiana border, will have 2.6 Bcf/d of sendout capacity and three 160,000 cubic meter LNG storage tanks. Cheniere said it expects to begin construction on the terminal in the first quarter of 2005. Service in expected to begin in late 2007.

Total has an option to proceed with the transaction and make an initial payment by Nov. 15. A second payment would be made after final FERC approval of the terminal or completion of construction financing. Total also has the right to terminate the transaction if the terminal is not approved by June 30, 2005.

Sabine Pass is among five Gulf Coast LNG terminals that Cheniere is planning to build. It is planning terminals in Brownsville, TX, and on Pinto Island in Mobile Bay, AL. Another project is planned in Corpus Christi, TX, and is pending at FERC. The Freeport LNG terminal, which is being built by Cheniere, Contango and ConocoPhillips, already has been approved by FERC and service is expected to begin in the second half of 2007 (see NGI’s special report on North American LNG Import Terminals).

“With Total anchoring the Sabine Pass terminal, and the 1.5 Bcf/d capacity of Freeport LNG fully committed, Cheniere has sponsored two of the most commercially advanced LNG receiving terminals under development in the United States,” said Keith Meyer, president of Cheniere LNG Inc. “The terminal development at Corpus Christi will soon follow which will provide Cheniere the ability to offer highly reliable service across a range of ship channels, unloading berths and downstream markets.”

Cheniere also announced last week that affiliate J&S Cheniere S.A. signed a 10-year time charter agreement for a third LNG cargo ship with a joint venture of Kawasaki Kisen Kaisha, Ltd. (K-Line), Shoei Kisen Kaisha and other companies. The new 154,200-cubic-meter LNG ship is being constructed by Imabari Shipbuilding Co., Ltd. and is expected to be delivered in the fourth quarter of 2007. In August of 2003, J&S chartered its first LNG vessel, the Tenaga Empat, which has been actively transporting LNG cargoes into the U.S. and Europe. On Aug. 25, J&S also signed a time charter agreement with K-Line to charter its second vessel, a new 145,000 cubic meter LNG ship being constructed by Kawasaki Shipbuilding Corp. for delivery in the fourth quarter 2007.

Total also has a 15% interest in Nigeria LNG Limited (NLNG), which earlier this year approved construction of a sixth LNG train at the Bonny Island liquefaction plant. Train 6, which will come on stream in late 2007, will have a capacity of 4.1 million metric tons a year of LNG, raising total production capacity to 22 million metric tons a year of LNG and 4.6 million metric tons a year of liquefied petroleum gas (LPG) and condensate. Three trains are currently in production, while trains 4 and 5 are under construction and scheduled to come on stream next year. Total will supply an additional 1 billion cubic meters a year of equity gas to the plant to feed train 6 and will lift, through wholly-owned subsidiary Total Gas & Power Ltd., 1.2 billion cubic meters a year of LNG, on top of the 0.3 billion from trains 4 and 5. The LNG will be marketed in Europe and North America.

In Angola, ChevronTexaco, ExxonMobil, BP, Total, and Sonangol also are proposing to build an LNG train based on offshore associated gas for export to North American and European markets. The plant would initially have a single 195 Bcf/year train with the option for development of additional trains later.

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