Freeport LNG today announced it has entered into a binding 20-year Liquefaction Tolling Agreement (LTA) with SK E&S LNG for a base quantity of 2.2 million tonnes per annum (mtpa).
The deal commences upon completion of construction of the third train of Freeport LNG’s proposed natural gas liquefaction and LNG loading facility on Quintana Island near Freeport, Texas.
“We welcome SK as a customer to the Freeport LNG liquefaction project. SK’s strong market of 3.5 million South Korean customers adds another highly experienced LNG industry participant to our already strong customer base. With our separate announcement today of entry into an LTA with Toshiba Corporation, Freeport LNG is positioned to close financing and commence construction of the third train in late 2014,” said Michael S. Smith, Chief Executive Officer, Freeport LNG.
“The SK agreement provides a unique opportunity for the United States to support our key ally and free trade partner, South Korea, SK’s primary market for the LNG received from the Freeport project,” continued Smith.
“SK E&S is pleased to join Freeport LNG and its prestigious partners in what we believe to be a world-class facility that will set a new standard in the LNG industry. We look forward to working closely with our new partners in creating value for all our respective stakeholders. SK E&S is committed to growing its domestic leadership position on a global stage through continued development and expansion of our integrated LNG strategy with Freeport LNG as our key partner,” said J.J. Yu, Chief Executive Officer, SK E&S.
“This transaction represents a milestone achievement for both companies. SK is proud to build upon our 20+ year commitment to the US market with an important partnership that elevates our standing in the global energy community and sets the stage for continued investment by SK in the United States,” said Shaun Parvez, President, SK USA.
Freeport LNG has previously announced the execution of LTAs with Osaka Gas Co., Ltd. (Osaka Gas) and Chubu Electric Power Co. (Chubu Electric), each for 2.2 mtpa, and with BP Energy Company (BP), for 4.4 mtpa. The Osaka Gas and Chubu Electric LTAs commence upon completion of construction of the initial liquefaction train, and the BP LTA commences upon completion of construction of the second liquefaction train.
“Adding SK and Toshiba to our existing customer base of Osaka Gas and Chubu Electric, two of the largest natural gas and electric utility service providers in Japan, and BP, one of the world’s leading international oil and gas companies, further enhances the strength of our project and the best-in-class suite of counterparties to support financing,” continued Smith. “We intend to close financing and commence construction on the initial two liquefaction trains in early 2014 upon receipt of regulatory approvals. Financing and commencement of construction on the third liquefaction train is expected in the second half of 2014.”