Freeport LNG Signs up Trafi

The Texas-based Freeport LNG project announced June 26 it has entered into a binding mid-term sales and purchase agreement (SPA) with trader Trafigura for 0.5mn metric tons per year.

It said the contract will be supplied from its liquefaction/export facility on Quintana Island near Freeport, Texas from July 1, 2020, soon after expected completion of construction of its third liquefaction train.

Trafigura added that the contract will last three years starting mid-2020 and would be supplied on a free-on-board (fob) basis at the Texan terminal.

"We welcome Trafigura's more than 25 years of global commodity trading experience to Freeport LNG's expanding operations. We view this as the start of a long-term relationship that will be key in growing our future business," said Freeport CEO Michael Smith. Trafigura's Asia oil chief Hadi Hallouche said that the deal shows that it "puts the security of supply for its customers at the heart of our LNG strategy."

Freeport LNG began operating as an import terminal in June 2008, but is expected to begin export operations in 2019 - somewhat delayed by Hurricane Harvey in August 2017 and contractor delays.

In aggregate, its three natural gas liquefaction trains currently under construction are expected to produce in excess of 15mn mt/yr LNG, of which Freeport said that 13.4mn mt/yr has been contracted to Jera, Osaka Gas, BP, Toshiba America LNG Corp, and South Korea's SK E&S LNG. A fourth liquefaction train is under development with an expected start date in 2023.  

Trafigura last month signed a second storage and reload services agreement with Singapore LNG, following one from the first that it signed in mid-2015.