Cheniere Energy's gambit starts paying off with 20-year LNG deal in Portugal

MarketsAssociated Press

Cheniere Energy landed a 20-year contract to supply natural gas in Portugal, sending shares up 8 percent in early trading.

The natural gas boom in the U.S. has led to a rush by major producers to put into place the infrastructure to ship overseas.

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Companies such as Exxon Mobil and Sempra Energy are seeking federal permits for more than 20 export projects that could handle as much as 29 billion cubic feet of natural gas a day.

Only one license has been issued in the U.S. to build a liquid natural gas export terminal, however, and Cheniere owns it.

The contract announced Thursday, through Cheniere subsidiary Corpus Christi Liquefaction, will be sold to the utility company EDP Energias de Portugal S.A.

EDP also has electricity and gas operations in Spain and distributes gas and generates electricity in the Iberian Peninsula.

EDP agreed to buy 770,000 tons of liquefied natural gas per year once operations begin at the third train of the LNG export facility being developed by Cheniere near Corpus Christi, Texas. A train refers to a company's liquefaction and purification facility. The Corpus Christi liquefaction project is being designed and permitted for up to three trains. Deliveries from the third train are expected to occur as early as 2019.

The agreement is subject to the Corpus Christi liquefaction project receiving regulatory approvals, obtaining the necessary financing arrangements and making a final investment decision to build the project's third train.

The deal has an extension option of up to 10 years.

Shares of Cheniere Energy Inc., based in Houston, climbed $5.47, or 8.4 percent, to $70.95 in morning trading.