Boston, MA 04/08/2014 (wallstreetpr) – Cheniere Energy, Inc. (NYSE:LNG) has announced it has reached an agreement with Spanish energy giant, Endesa SA, for the sale of 1.5 million tons a year of liquefied natural gas LNG. This is a major sales order for Cheniere considering the agreement is for 20 years from the first commercial delivery, with an option of extending the contract for a further 10 years once the first contract is through. Deliveries are expected to start in 2018.
New Plant to have a Production Capacity of 13.5 Million Tons Annually
The exports will be made from the company’s Texas facility that is still under development and expected to have a capacity of exporting up to 13.5 million tons annually once complete. The deal signed with Endesa is the second of its kind, having signed a similar agreement with PT Pertamina , an Indonesia state owned company back in December last year.
Cheniere Energy, Inc. (NYSE:LNG)’s Chief Executive Officer has also announced that his company is in line to make regulatory and investment decisions to start the construction of the LNG export terminal by early next year. The company is now awaiting consent from the U.S Federal Energy Regulatory Commission to export LNG. Endesa is a leading utility in Spain but has operations in Latin America thus consent will be required for the exports to be made.
Cheniere Awaiting Authorities Consent for Exports
Companies are usually required to seek consent from the U.S Federal Energy Regulatory Commission when transacting business with countries without a free trade agreement with the U.S. Cheniere is currently working on finalizing commercial agreements with other companies as it nears completion of other regulatory process.
The announcement of the news made the company stock surge 1.7% in premarket trading with Deutsche bank analysts raising their price target to a high of $67 from $57. The signed agreement with Endesa represents 33% of the volume from the first liquefaction of the yet to be built Corpus Christi.
Cheniere Energy, Inc. (NYSE:LNG)’s shares remained unchanged on Monday trading session moving up by 0.42% to close the day at a high of $55.03.
