This contract solidifies a prior non-binding agreement and is part of a series of deals aiming to secure the project's financing and construction.
In a significant move for the energy sector, Texas LNG Brownsville LLC has announced a definitive 20-year Sales and Purchase Agreement (SPA) with Gunvor Singapore Pte Ltd. This landmark deal converts a previous non-binding Heads of Agreement (HOA) and secures the sale of 0.5 million tonnes per annum (MTPA) of liquefied natural gas (LNG) on a Free on Board (FOB) basis from the proposed Texas LNG export terminal.
The facility, a four million tonnes per annum project slated for construction in the Port of Brownsville, Texas, is now moving closer to a Final Investment Decision (FID). This agreement with Gunvor, a subsidiary of the global commodity trading firm Gunvor Group, is a crucial step in the commercialization of the project.
Brendan Duval, CEO and Founder of Glenfarne Energy Transition, LLC, the parent company of Texas LNG, expressed confidence in the project's momentum. "Texas LNG is moving rapidly towards a targeted year-end Final Investment Decision," Duval stated. He highlighted that the agreement with Gunvor is a key part of the project's strategy to secure enough commercial contracts to reach FID. Duval also pointed to the advanced state of project financing and the recent completion of the FERC process as indicators of the project's readiness to proceed.
Kalpesh Patel, Co-Head of LNG Trading at Gunvor, also commented on the deal's importance. "As one of the foundation customers of Texas LNG, we are pleased to complete this agreement and open up new sources of U.S. LNG to meet the growing demand for secure energy in overseas markets," Patel said. This sentiment underscores the increasing global demand for reliable energy sources, particularly from the U.S.
The majority of Texas LNG's planned output is intended to be sold under long-term, binding agreements. In addition to the Gunvor deal, the company is actively working to convert HOAs with other major players, including Macquarie and an unnamed "highly experienced, investment-grade global LNG player," into definitive contracts. This ongoing commercial progress is vital for securing the necessary funding.
The project's engineering, procurement, and construction (EPC) are being led by Kiewit, a well-regarded firm in the industry, under a lump-sum turnkey structure. This approach provides a fixed price and timeline, which helps in managing project risks and securing financing. The combination of strong commercial backing, regulatory approvals, and a robust EPC framework positions the Texas LNG project as a key player in the future of U.S. LNG exports. The finalization of this agreement with Gunvor is a clear signal of the project's viability and its readiness to proceed to the next stage of development.
