(EnergyAsia, February 2 2012, Wednesday) --- Cheniere Energy Partners LP said its subsidiary, Sabine Pass Liquefaction LLC, has increased its liquefied natural gas (LNG) sale volume to BG Gulf Coast LNG LLC, a subsidiary of UK’s BG Group plc, following an amendment to their 20-year supply agreement.

BG has agreed to purchase an additional two million tonnes/year (t/y) of LNG from Sabine when it starts up its second, third and fourth trains, bringing its total annual contract quantity to 5.5 million t/y. Under the original agreement, BG will purchase 3.5 million t/y of LNG with the start-up of its first train.

The companies said the purchase terms essentially remain the same with BG paying Sabine a fixed sales charge for the contracted quantity and a contract sales price for LNG purchases based on the Henry Hub index traded on the New York Mercantile Exchange (NYMEX)with the exception that the fixed sales charge will increase on a pro-rated basis to account for the increased fixed sales charge on the additional volumes.

Sabine Liquefaction is developing a liquefaction project at the Sabine Pass terminal in the US Gulf Coast that is expected to include four liquefaction trains capable of producing up to 18 million t/y of LNG.

Apart from the BG deal, Sabine Liquefaction has signed three sale and purchase agreements with Gas Natural Fenosa for 3.5 million t/y and with GAIL India Limited also for 3.5 million t/y.

Sabine Liquefaction said it expects to sell an additional 3.5 million t/y of LNG with the start-up of its third train, bringing total contracted volumes to 16 million t/y or approximately 90% of total expected production.

Charif Souki, Sabine’s chairman and CEO, said: “In assessing the optimal contracting strategy for the Sabine Liquefaction Project, we have decided to sell part of the additional volumes on a long-term basis to BG, our first foundation customer.

“There's a trade-off in whether we sell the additional volumes on a long-term basis or in the open market.  Contracting a portion of the additional volumes adds further certainty to the long-term cash flows of the project and preserves the opportunity for additional upside.”

Cheniere Partners fully owns the Sabine Pass LNG receiving terminal located on the Sabine Pass Channel in western Cameron Parish in Louisiana state.  The terminal has regasification and send-out capacity of four billion cubic feet per day (bcf/d) and storage capacity of 16.9 billion cubic feet equivalent (bcfe).

Cheniere Partners is developing a project to add liquefaction and export capabilities to the existing infrastructure at the Sabine Pass LNG terminal. The Sabine Pass Liquefaction projectis being designed and permitted for up to four modular trains, each with a nominal capacity of approximately 4.5 million t/y.

The project is expected to be constructed in phases, with each train starting up approximately six to nine months after the previous train. The first phase will include two liquefaction trains due to start up by 2015.

Last November, Sabine Liquefaction awarded a lump sum turnkey contract for the engineering, procurement and construction of the first phase of the project to US engineering giant Bechtel Oil, Gas and Chemicals Inc by the end of this year.