Britain’s Centrica plc has struck a 20-year sale and purchase agreement with Cheniere Energy Partners LP’s Sabine Pass Liquefaction LLC for 1.75 million metric tons per annum (mmtpa) of liquefied natural gas (LNG) with deliveries to begin as early as 2018.

The contracted amount is equivalent to 91,250,000 MMBtu annually and, along with Sabine’s contract with Total Gas & Power North America Inc. (see Daily GPI, Dec. 18, 2012), brings Train 5 contracted volumes to 3.75 mmtpa. Centrica is Sabine’s sixth LNG export customer.

“Centrica serves over 11 million households in Britain, nearly half of the country’s homes. With this contract, exports from the United States will become an important part of the UK’s overall energy supply portfolio,” said Cheniere CEO Charif Souki.

Centrica is to buy LNG on a free on board basis at a price indexed to Henry Hub, plus a fixed component, Sabine said. The 20-year contract begins on the date of first commercial delivery from Train 5 and has an extension option of up to 10 years. The contract is contingent upon regulatory approvals and financing for the fifth train. Deliveries from Train 5 are expected to occur as early as 2018.

Centrica businesses include British Gas, which serves about 12 million homes in Britain, nearly half of the country’s homes, as well as providing energy to one million UK businesses, and Direct Energy, which has businesses in natural gas production, power generation and distribution in North America.

Sabine is developing six liquefaction trains, each with expected nominal capacity of 4.5 mmtpa. Construction of the first two trains is under way with construction of the third and fourth trains expected to begin during the first half of this year. Permitting and preliminary engineering have begun for the fifth and sixth trains.

The National Energy Policy Act pre-filing process for Sabine’s fifth and sixth trains began in February, and Sabine expects to file the full application as early as September. An application has been filed with the U.S. Department of Energy for exports to free trade agreement (FTA) and non-FTA countries for the Total contract (see Daily GPI, March 11); a similar filing for the Centrica contract is expected in the coming weeks, Souki said.

©Copyright 2013Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.