King and Spalding has advised Gas Natural Fenosa on the purchase of almost 5 billion cubic meters of LNG per year – an amount equivalent to 15% of annual Spanish natural gas consumption – from U.S.-based Sabine Pass Liquefaction, LLC. Sabine Pass is an affiliate of Cheniere Energy, Inc., which announced today the completion of all milestones and issuance of a full notice to proceed to construct the first two trains of the approximate $5.6 billion Sabine Pass liquefaction project in Cameron Parish, Louisiana. The LNG purchase agreement will have an initial term of 20 years.
Gas Natural Fenosa will receive the LNG at the Sabine Pass LNG export terminal beginning in 2017, once construction of the second liquefaction train being developed by Cheniere is completed. This contract marks a milestone in the history of Gas Natural Fenosa, which for the first time will receive LNG exported from the United States. Because there are no destination restrictions on the delivery of this LNG, it can be marketed advantageously around the world.
The King & Spalding team advising Gas Natural Fenosa on the purchase was led by partner George E. “Ned” Crady, with assistance from counsel William A. “Pete” Musgrove and associate Matthew Salo.
“We congratulate Gas Natural Fenosa on the completion of this unique U.S.- sourced LNG export supply agreement,” said Crady. “The successful negotiation of this LNG purchase agreement involving the export of U.S.-sourced LNG to both Free Trade Agreement and Non Free Trade Agreement markets involved a number of unique and complex legal issues and we are very pleased to have helped our client see it through.”
