Cheniere Energy Inc. and Korea Gas Corporation (KOGAS) have commenced their 20-year Sales and Purchase Agreement (SPA) to supply U.S.-sourced LNG to KOGAS from the Sabine Pass Liquefaction facility in Louisiana. The SPA, which was originally signed in January of 2012, officially began on June 1, 2017, with the first cargo loading the following day.
Under the terms of the SPA, Cheniere will sell and make available for delivery to KOGAS approximately 3.86 million tons of LNG per year, which represents more than 10 percent of South Korea’s total annual demand.
“KOGAS is an ideal commercial partner as one of the largest buyers of LNG in the world and serves South Korea, an important economic and national ally of the United States,” said Jack Fusco, President and CEO of Cheniere. “This is just the beginning of a long and productive relationship that will be beneficial to both companies and both countries, and we hope to continue to grow this relationship between KOGAS and Cheniere.”
KOGAS President & CEO Seung-Hoon Lee says this agreement will help improve trade between the U.S. and Korea.
“This long-term LNG SPA with Cheniere Energy will contribute significantly to improving the trade balance between the United States and Korea,” Lee said. “Plus, the destination-free US LNG will greatly increase the flexibility and efficiency in the global LNG market.”
In February 2016, Cheniere became the first company to ship LNG from the contiguous United States in over 50 years, and is currently the only exporter of U.S. LNG.