(EnergyAsia, October 28 2011, Friday) — UK’s BG Group said it has signed an agreement with Sabine Pass Liquefaction LLC to purchase 3.5 million tonnes per annum (mtpa) of liquefied natural gas (LNG) over a 20-year period from the Sabine Pass LNG terminal in Louisiana state in the US. Sabine Pass is a subsidiary of Houston-based Cheniere Energy Partners LP.

BG said this would be the first long-term LNG purchase agreement from a project on the US Gulf Coast. The agreement will enable BG to secure LNG cargoes for export from the US as early as 2015.

Construction of the liquefaction facilities at Sabine Pass is expected to start next year, with the initial phase to consist of two trains capable of producing up to nine million tonnes of LNG a year. BG Group said it is not an investor in the proposed liquefaction facilities.

Cheniere will sell the LNG to BG for 115% of US benchmark Henry Hub prices plus a premium of US$2.25 per million British thermal units.

BG Group chief executive Frank Chapman said:

“This is a ground-breaking agreement for BG Group, giving us first-mover advantage in securing LNG export volumes from the US Gulf Coast. It is the first agreement of its kind in this region and it secures us early access to the rapidly emerging commercial opportunities driven by the recent material increases in US gas reserves.

“We are delighted to have signed this landmark deal for BG Group in a market and a country where we have been intimately involved, throughout the gas chain, for a decade. It adds further diversity to our global LNG supply portfolio and builds upon our proven track record in capturing and developing new opportunities that continue to drive the global growth of our LNG business.”

BG Group said it also is continuing to pursue an expansion of the Lake Charles LNG terminal, located in Louisiana, USA, to provide natural gas liquefaction services. Authorisation has been received from the US Department of Energy (DOE) to export up to 730 billion cubic feet of natural gas per year (approximately 15 mtpa) from the Lake Charles terminal to countries that have a free trade agreement in place with the US.

The DOE is reviewing an application to export natural gas from the Lake Charles terminal to countries that do not have a free trade agreement with the US.

NYSE-listed Cheniere Energy Partners LP is a Delaware master limited partnership that fully owns the Sabine Pass LNG terminal located in western Cameron Parish in Louisiana state on the Sabine Pass Channel. The terminal has sendout capacity of four bcfd and storage capacity of 16.9 Bcfe. The Sabine Pass LNG terminal has been authorised by the US Department of Energy to export up to 803 billion cubic feet of natural gas per year, or 16 mtpa).