ChevronTexaco inks LNG agreement with Cheniere
Tue Nov 9, 2004 09:39 AM ET
yahoo.reuters.com
NEW YORK, Nov 9 (Reuters) - ChevronTexaco Corp. (CVX.N: Quote, Profile, Research) on Tuesday said it signed a 20-year agreement for 700 million cubic feet per day of capacity at Cheniere Energy Inc.'s (LNG.A: Quote, Profile, Research) Sabine Pass Liquified Natural Gas terminal in Louisiana.
The terminal use contract calls for Chevron USA to pay Sabine Pass up to $20 million in reservation payments, beginning with an unconditional payment of $5 million within 15 days.
Under the terms of the contract, Chevron will pay 32 cents per million British Thermal Unit, with a clause for inflation, for the 700 mmcf per day of regasification capacity for a 20-year period beginning no later than July 1, 2009.
Chevron USA has the option to reduce its capacity to 500 mmcf per day or increase to 1 billion cubic feet by December 1, 2005 at the same tariff.
The companies also continue to negotiate agreements for ChevronTexaco to make a $200 million equity investment in Sabine Pass LNG L.P., which will own and operate the terminal, for a 20 percent stake. The agreement is subject to corporate approval, including approval by ChevronTexaco's board, by December 20, 2004.
Cheniere's 2.6 billion cubic feet per day Sabine Pass LNG profit received its environmental impact statement from federal regulators in August 2004. Construction is planned to begin by the end of the first quarter of 2005.
Shares of ChevronTexaco were trading down 15 cents at $53.21 in early trade on the New York Stock Exchange. Shares of Cheniere, which trade on the American Stock Exchange, closed at $26.21 on Monday.
© Reuters 2004. All Rights Reserved. |
