Cheniere Energy Paves Way For U.S. Natural Gas Exports
Cheniere Energy (AMEX:LNG) stock climbed as much as 2.4 percent in pre-market trading on Monday before it simmered down to more modest gains around 1.55 percent by mid-morning. The buzz is that Centrica (CPYYF.PK), a British multinational utility company, has entered into an agreement to purchase 1.75 million metric tons of liquefied natural gas per year for 20 years, with the option for a 10-year extension.
The agreement states that Centrica will purchase the gas at a price indexed to the Henry Hub price plus a fixed component. Centrica will export the gas from the Sabine Pass liquefaction plant in Louisiana. The deal is predicated on Cheniere receiving regulatory approval and financing to compete work on the fifth LNG train at the plant.
The news, while a significant development for Cheniere, is evidence of North America’s changing role in the global energy market. U.K. Secretary of State for Energy and Climate Change Ed Davey commented about the deal: “Security of UK energy supply lies in diversity so I am pleased that Centrica has announced today that it has secured a long-term North American liquefied natural gas export contract with Cheniere Energy Partners. The UK already receives gas from a range of countries and we can now add the US to Norway, the Netherlands and Qatar as sources of supply”…