Iberdrola Agrees to 20 Year EUR4.1B LNG Export Deal with Cheniere Will buy 1 billion cubic meters/year from Corpus Christi liquefaction plant
IBERDROLA and a subsidiary of Cheniere Energy, Inc. has signed a contract for the supply of approximately 1 bcm (billion cubic meters) of liquefied natural gas (LNG) per year beginning in 2019. The 20-year agreement, valued at around EUR4.1 billion, involves the supply of LNG to Iberdrola at the Corpus Christi liquefaction plant that Cheniere will build near Corpus Christi, Texas.
The contract, signed at IBERDROLA's offices in Madrid by the company's global energy management director Angel Chiarri and Meg Gentle, Marketing Executive Vice President at Cheniere, will serve to substitute part of the LNG covered by supply agreements that will expire during this period.
IBERDROLA will receive an initial volume of 0.5 bcm of LNG once the first train is operating, starting as early as 2018. Iberdrola will then receive an additional 0.5 bcm of LNG once operations start on the second train. Cheniere expects to build up to three trains at the Corpus Christi plant capable of producing in aggregate up to 13.5 million tons per annum (mtpa).
The contract, linked to the Henry Hub gas price in the US, is FOB (Free on Board), with open destination, although the LNG will be used essentially to supply IBERDROLA markets in the UK and Spain.
At the end of March this year, IBERDROLA had 3.6 million customers for gas around the world (2.2 million in the UK. 0.8 million in Spain and 0.6 million in the US), as well as combined cycle gas plants with a total capacity of nearly 13,000 megawatts (5,900 MW in Spain, 5,050 MW in Mexico and 2,000 MW in the UK). In 2013, the Group supplied a total of 7.6 bcm of gas worldwide.
IBERDROLA has arranged a number of long term LNG supply contracts in recent years, with companies including ENI, Sonatrach, Nigeria LNG and Statoil, enabling it to sign important supply accords with BP to supply 0.5 bcm a year at Spanish regasification plants over 10 years, and with Dong Energy to supply 1bcm a year at the Rotterdam regasification plant, also over 10 years.
Through major agreements such as the one signed with Cheniere, IBERDROLA has consolidated its role as one of the world's leading energy operators, with operations in around 30 countries, 45,000 MW of installed capacity, 32 million customers and more than 28,000 employees.
Under the Strategic Outlook for 2014-2016 announced in London last February, the Group will invest a net EUR9.6 billion during this period, centered mainly in regulated markets with a focus on the UK, US and Mexico.
Iberdrola USA is the U.S. subsidiary of global energy leader Iberdrola, S.A. The Iberdrola USA companies employ about 5,000 people with operations in 24 states from New England to the West Coast, providing electricity generation, transmission and distribution, natural gas storage and distribution, and energy services. For more information, please visit our website: www.iberdrolausa.com. Follow us on Twitter: @IberdrolaUSA