Cheniere Energy, Iberdrola sign 20-year, $5.6B LNG supply agreement

|About: Iberdrola S.A. ADR (IBDRY)|By:, SA News Editor

Cheniere Energy (LNG) +2.7% premarket after agreeing to sell 400K metric tons/year of liquefied natural gas to Spanish power company Iberdrola (IBDRY, IBDSF) upon commencement of operations of Train 1 of the LNG export facility being developed near Corpus Christi, Tex., and increasing to 800K metric tons/year upon commencement of Train 2.

The agreement is for 20 years beyond the date of first commercial delivery of the second train, with an extension option of up to 10 years; deliveries from Train 2 are expected to occur in 2019.

The Corpus Christi Liquefaction Project is being designed and permitted for up to three trains, with aggregate design production capacity of 13.5M metric tons/year of LNG.

Iberdrola says the deal is worth $5.6B and will allow it to fulfill its long-term fuel needs for gas generation plants in Spain and Britain, where it is also a major operator.