Iberdrola and Cheniere sign a supply contract of about €4.1 billion

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Iberdrola and the subsidiary of Cheniere Energy, Corpus Christi Liquefaction, 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 €4.1 billion, involves the supply of LNG to Iberdrola at the Corpus Christi liquefaction plant that Cheniere will build near Corpus Christi, Texas.
The contract 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 tonnes 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.
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.
Under the Strategic Outlook for 2014-2016 announced in London last February, the Group will invest a net €9.6 billion during this period, centered mainly in regulated markets with a focus on the UK, US and Mexico.