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USA: Cheniere, KOGAS Ink Sabine Pass LNG Deal

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Cheniere Energy Partners, L.P. said today that its subsidiary, Sabine Pass Liquefaction, LLC, has entered into a LNG sale and purchase agreement (SPA) with Korea Gas Corporation (KOGAS) under which KOGAS has agreed to purchase approximately 3.5 mtpa of LNG upon the commencement of train three operations.

Under the SPA, KOGAS will purchase LNG on an FOB basis for a purchase price indexed to the monthly Henry Hub price plus a fixed component. LNG will be loaded onto KOGAS’s vessels. The SPA has a term of twenty years commencing upon the date of first commercial delivery for train three, and an extension option of up to ten years.  Deliveries from train three are expected to occur as early as 2017.  The SPA is subject to certain conditions precedent, including but not limited to Sabine Liquefaction receiving regulatory approvals, securing necessary financing arrangements and making a final investment decision to construct the second phase of the liquefaction project.

KOGAS is our fourth foundation customer and we have now sold 16 mtpa of the 18 mtpa being developed at the Sabine Pass LNG terminal.  KOGAS is a strong addition to our portfolio of customers as it is the largest LNG importer in the world and the dominant gas provider for the Republic of Korea, a nation that is soon to become a Free Trade Nation with the U.S.” said Charif Souki, Chairman and CEO.We look forward to finalizing all necessary steps in order to begin construction of the first phase of our project early this year and more importantly, to becoming the first LNG exporter in the Continental U.S.

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USA: Cheniere, BG Ink LNG Sale and Purchase Deal

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Cheniere Energy Partners, L.P. announced today that its subsidiary, Sabine Pass Liquefaction, LLC, has entered into its first liquefied natural gas (LNG) sale and purchase agreement (SPA) with BG Gulf Coast LNG, LLC (BG), a subsidiary of BG Group plc, under which BG has agreed to purchase 3.5 million tonnes per annum (mtpa) of LNG.

Sabine Liquefaction is planning to develop the ability to produce 9 mtpa of LNG in the first phase of its project at the Sabine Pass Terminal owned by Cheniere Partners. On May 20, 2011, Sabine Liquefaction received authorization from the U.S. Department of Energy to export up to 16 mtpa of LNG destined to all countries with which trade is permissible.

Under the agreement, BG will pay Sabine Liquefaction a fixed sales charge for the full annual contract quantity and will also pay a contract sales price for LNG purchases based on the applicable Henry Hub index traded on the New York Mercantile Exchange. LNG will be loaded onto BG’s vessels. The SPA has a term of twenty years commencing upon the date of first commercial delivery, and an extension option of up to ten years. LNG exports are expected to commence as early as 2015. The SPA is subject to certain conditions precedent, including but not limited to Sabine Liquefaction’s receiving regulatory approvals, securing necessary financing arrangements and making a final investment decision to construct the liquefaction facilities.

BG is one of the largest participants in the global LNG markets and will be a strong foundation customer for our Sabine Pass liquefaction project,” said Charif Souki, Chairman and CEO. “Entering into this agreement is a significant milestone for our project and we look forward to finalizing additional commercial agreements and proceeding with the development of the first two trains.

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USA: Wartsila, Shell Ink Cooperation Deal to Promote LNG as Marine Fuel

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Wärtsilä, the marine industry’s leading solutions provider, and Shell Oil Company have signed a Joint Co-operation Agreement aimed at promoting and accelerating the use of liquefied natural gas (LNG) as a marine fuel. The agreement was signed in August 2011 and will run for several years.

Supplies of low cost, low emissions LNG fuel will be made available to Wärtsilä natural gas powered vessel operators, and other customers by Shell. The Joint Cooperation Agreement will focus first on supplies from the US Gulf Coast, and then later expand their efforts to cover a broader geographical range.

Gas fuelled marine engines are seen as being a logical means for ship owners and operators to comply with increasingly stringent environmental legislation. This agreement aims at increasing and easing the availability of natural gas for marine engine use, as well as developing the supply chain and infrastructure to facilitate the bunkering of LNG fuel. The two companies will jointly move these developments to marine markets in order to enhance its rapid introduction and use.

Wärtsilä has been at the forefront in the development of dual-fuel engine technology, allowing the same engine to be operated on both gas and diesel fuel. This dual-fuel capability means that when running in gas mode, the environmental impact is minimized since nitrogen oxides (NOx) are reduced by some 85 percent compared to diesel operation, sulphur oxide (SOx) emissions are completely eliminated as gas contains no sulphur, and emissions of CO2 are also lowered. Natural gas has no residuals, and thus the production of particulates is practically non-existent.

In addition to the environmental benefits that LNG fuel offers, the shipping industry is increasingly looking to gas as a means of reducing operating costs. With fossil fuel prices, and especially the cost of low carbon marine fuel, likely to continue to escalate, gas is an obvious economic alternative. In promoting gas propulsion, the two companies aim at reducing client risk, thereby accelerating market demand.

It’s an exciting time for the industry to have Shell, a major player, committed to increasing the availability of clean natural gas as a marine fuel. The marine community is becoming increasingly aware of the benefits provided by Wärtsilä natural gas engines as a means of reducing both costs and the environmental footprint. Natural gas engines represent a rare win-win, capturing emissions reduction and operational savings,” says Christoph Vitzthum, Group Vice President, Wärtsilä Services.

Drawing from decades of experience in the development and application of natural gas engines for both the power generation and marine industries, Wärtsilä is the global leader in this advanced technology. “Clean, safe natural gas represents a true shipping paradigm shift; years ago it was sail to steam, then came the move from steam to diesel, and now it’s a new era for gas propulsion,” says Jaakko Eskola, Group Vice President, Wärtsilä Ship Power.

We are pleased to work with Wärtsilä to move forward with this significant step in introducing LNG-powered vessels into the US market, providing a clean, abundant and affordable fuel option,” said David Lawrence, Shell’s executive vice president Exploration and Commercial.

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