Increased U.S. LNG to Bolster European Energy Supply in 2030s Pending Cheniere’s Sabine Pass Expansion
Cheniere Marketing, a subsidiary of U.S.-based Cheniere Energy, has finalized a long-term sale and purchase agreement (SPA) to supply liquefied natural gas (LNG) to Galp Trading, an affiliate of Portuguese oil and gas company Galp Energia.
Under this 20-year agreement, Galp will purchase approximately 0.5 million tonnes per annum (mtpa) of LNG from Cheniere on a free-on-board (FOB) basis, with pricing indexed to the Henry Hub price plus a fixed liquefaction fee. Deliveries are expected to commence in the early 2030s.
Galp’s access to U.S. LNG hinges on a positive final investment decision (FID) for the second train of the Sabine Pass Liquefaction (SPL) expansion project, known as train eight, which is currently under development. The expansion of SPL is set to increase the terminal’s capacity to 20 mtpa of LNG.
Furthermore, Galp has agreed to purchase a limited number of early cargoes from 2027 until the start of the second train. This agreement provides Galp with access to competitive U.S. volumes, enhancing the flexibility and diversity of its portfolio.
“We are pleased to enter into this long-term agreement with Galp, a leader across Iberia’s energy sector, which reinforces the critical role U.S. natural gas is expected to play in Europe’s energy mix into the second half of this century,” stated Cheniere’s President and Chief Executive Officer, Jack Fusco.
“We look forward to supplying our flexible, reliable, and cleaner-burning LNG to Galp under this new long-term agreement. This SPA is expected to further support the SPL Expansion Project and demonstrates continued momentum as we advance the project’s development.”
In addition to activities at the LNG terminal, Cheniere has recently commenced commercial operations of its 40-mile ADCC pipeline. This pipeline, designed to transport up to 1.7 billion cubic feet per day (Bcf/d) of LNG, expandable to 2.5 Bcf/d, connects Whistler Pipeline’s Agua Dulce Header and the Corpus Christi LNG facility in Texas.
Sabine Pass is also the site of another LNG project co-developed by ExxonMobil and QatarEnergy—the Golden Pass LNG (GPX) export terminal. This project recently encountered a setback when one of the lead contractors filed for bankruptcy, raising concerns about its scheduled startup next year.
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