Under the agreement, KOSPO will buy approximately 0.4 million tonnes per annum (mtpa) of LNG on a delivered ex-ship basis from Cheniere Marketing International, a unit of US-based Cheniere.
The long-term SPA will start in 2027 and continue until 2046, with a smaller quantity to be delivered from 2024.
The price for LNG delivered before 2027 will be based on market rates, after that, it will be indexed to the Henry Hub price, with an additional fee.
The volumes specified in the agreement between 2028 and 2046 are contingent upon a favourable final investment decision for the first train of the Sabine Pass Liquefaction Expansion Project (SPL Expansion Project).
Cheniere President and CEO Jack Fusco said: “We are pleased to enter into this long-term LNG contract with KOSPO, the leading power generation company in Korea, in support of KOSPO’s growing natural-gas-fired power generation capacity.
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“This SPA is expected to support the SPL Expansion Project, and we are excited to build commercial momentum as the project’s development progresses.
“This SPA further highlights Cheniere’s leadership in providing flexible, cleaner burning energy supply to meet both the energy security needs and environmental goals of our customers in both the short and long term.”
The SPL Expansion Project aims to add up to three natural gas liquefaction trains, which are anticipated to have a combined LNG production capacity of around 20mtpa.
Earlier this year, Cheniere subsidiary Cheniere Energy Partners commenced the pre-filing review process for the project with the Federal Energy Regulatory Commission under the National Environmental Policy Act.