Galp signs 20-year deal with Cheniere for LNG supply

Portugal’s Galp has signed a 20-year agreement with Cheniere to purchase US LNG, the company announced on August 5.

Under the deal, Galp will buy 0.5mn tonnes/year of LNG, contingent on the final investment decision of the second train of the Sabine Pass project, currently under development. Galp's volumes will be bought on a free on board (FOB) basis and priced indexed to Henry Hub plus a fixed liquefaction fee.

The agreement also includes access to a limited number of early cargoes starting from 2027 and continuing until the second train becomes operational. “This agreement further enhances Galp’s LNG sourcing basket with access to competitive US volumes, adding flexibility and diversity to its portfolio,” Galp stated.

The Sabine Pass expansion project aims to develop up to approximately 20mn tonnes per year of LNG capacity. Cheniere operates one of the largest liquefaction platforms in the world, consisting of the Sabine Pass and Corpus Christi liquefaction facilities on the US Gulf Coast. Together, these facilities have a total production capacity of approximately 45mn tonnes/year of LNG in operation, with an additional 10mn tonnes/year of expected production capacity under construction.