HomeNewsCheniere strikes 20-yr LNG deal with Portugal's Galp Energia

Cheniere strikes 20-yr LNG deal with Portugal's Galp Energia

8/5/2024

Cheniere Energy has agreed to supply 500,000 metric tpy of liquefied natural gas (LNG) to a subsidiary of Galp Energia for 20 yr.

Deliveries are expected to begin in the early 2030s, but are dependent on the approval for an additional liquefaction unit (Train Eight) for Cheniere's Sabine Pass Liquefaction Expansion Project.

As part of the deal, Galp will also buy some LNG cargoes from Cheniere before train eight starts.

Sabine Pass currently operates six liquefaction trains, each with a production capacity of approximately 5 MMtpy of LNG. An expansion project is underway to add up to 20 MMtpy of additional capacity.

In February, Sabine Pass filed an application with the Federal Energy Regulatory Commission (FERC) for authorization to site, construct and operate the Sabine Pass Stage 5 Expansion Project.

Last year, Cheniere Energy said it would supply 800,000 MMtpy of LNG to Germany's BASF, starting mid-2026.

Why it is important. In 2023, the U.S. emerged as the global leader in LNG exports, surpassing previous frontrunners Australia and Qatar. This shift was driven by increased global demand and higher prices, partly due to supply disruptions and sanctions related to the Russia-Ukraine conflict.

During an earnings call in May, Cheniere's vice president noted that they anticipated rising LNG demand in Asia as prices decreased, while high storage levels in Europe resulted in a 13% drop in demand on the continent.

"This SPA is expected to provide further support for the SPL Expansion Project, and demonstrates continued momentum as we progress development of the project," said Cheniere CEO Jack Fusco.

 

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