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Cheniere and Pertamina sign LNG agreement

LNG Industry,

Cheniere Energy subsidiary, Corpus Christi Liquefaction, has signed a liquefied natural gas (LNG) sale and purchase agreement (SPA) with PT Pertamina.

Under the agreement, Pertamina will purchase approximately 0.8 million tpa of LNG following the start up of the LNG export facility being developed near Corpus Christi, Texas. The Corpus Christi Liquefaction project is being designed and permitted for up to three LNG trains, with aggregate design production capacity of 13.5 million tpa of LNG.

Under the SPA, Pertamina will purchase LNG on an FOB basis for a purchase price indexed to the monthly Henry Hub price plus a fixed component. The contract has a term of twenty years, beginning on the date of first commercial delivery and has an additional extension option of up to ten years. Deliveries are expected to commence as early as 2018.

Indonesia’s energy needs

Pertamina CEO, Charif Souki, commented: "Pertamina, an Indonesian state-owned energy company, is the first foundation customer for our Corpus Christi Liquefaction Project being developed in Texas. Indonesia has historically been one of the largest exporters of LNG and is now in the process of converting one of their export terminals into an LNG receiving terminal. Pertamina's SPA is the first long-term commitment made to procure LNG from the international market for delivery into Indonesia. We look forward to supplying LNG to meet Indonesia's growing energy needs and to supporting Indonesia's efforts to enhance its energy security.

"Furthermore, this SPA is a significant milestone for our project, and we are continuing to make progress. We are nearing completion of the regulatory process and are continuing to work towards finalising additional commercial agreements. We expect to complete all necessary steps to begin construction on our second LNG export terminal by the second half of 2014."

The SPA is subject to certain conditions precedent, including but not limited to Corpus Christi Liquefaction receiving regulatory approvals, securing necessary financing arrangements and making a final investment decision to construct the first train of the project.

Adapted from press release by Katie Woodward

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