In Part 2, we looked at the specific AAPs and the two contractual models used primarily by US LNG producers to secure capacity commitments for export terminals: traditional toll agreements and Cheniere Energy`s hybrid free-board (FOB) structure. The non-road projects currently being commissioned online or in service – Cove Point, Freeport, Cameron and Elbe – use toll agreements under which the LNG operator collects charges to liquefy the gas but does not own ownership of the gas or LNG produced. Instead, the LNG buyer already owns the LNG produced and must take it back or resell it. In comparison, Cheniere`s two facilities, Sabine Pass and Corpus Christi, use a hybrid model in which the company`s marketing arm ensures pipeline capacity and gas supply for its customers over the long term. Cheniere takes ownership of the gas, liquefies it, and then sells the LNG produced to its customers on the basis of FOB. At Cheniere plants, customers must pay a fixed reservation and liquefaction fee per month, whether or not they take possession of the LNG. If a cargo is refused, Chenieres MarketingArm has this capability and can produce and sell the freight at low marginal costs, so the freight is almost certainly still produced. For more information, see Cheniere`s website under www.cheniere.com and Quarterly Report on Form 10-Q for the quarter ended September 30, 2017 and was submitted to the Securities and Exchange Commission. The deal is the first sign that Cheniere, by far the largest seller of LNG in the U.S., could move away from its characteristic LNG pricing mechanism in future purchase agreements with LNG buyers by decoupling from the Henry Hub price of U.S. gas. the original version on PR Newswire is available at: www.prnewswire.com/news-releases/cheniere-and-edp-sign-20-year-lng-sale-and-purchase-agreement-300011855.html Cheniere Energy, Inc. is a Houston-based energy company, primarily involved in LNG-related activities, that owns and operates the Sabine Pass LNG Terminal and the Creole Trail Pipeline in Louisiana.
Cheniere is monitoring the associated commercial opportunities, both upstream and downstream of the Sabine Pass LNG terminal. Through its subsidiary Cheniere Energy Partners, L.P., Cheniere is developing a liquefaction project at the Sabine Pass LNG terminal, in addition to existing regasification facilities for up to six LNG trains, each of which will have a planned production capacity of approximately 4.5 mtpa (“Sabine Pass Liquefaction Project”). Construction of LNG trains 1 to 4 at the Sabine Pass Liquefaction Project has begun. Cheniere has also launched a project to develop liquefaction facilities near Corpus Christi, Texas. The Corpus Christi Liquefaction Project is designed and approved for up to three LNG trains with a total production capacity of up to 13.5 mtpa and would include three LNG storage tanks with a capacity of 10.1 bcfe and two LNG transmission docks. . . .