March 28, 2014 / 9:00 AM / 4 years ago

UPDATE 2-French GDF Suez to sell U.S. LNG to Taiwan

(Re-leads, adds detail and background on pricing, U.S. export plant and trade trends)

PARIS/MILAN, March 28 (Reuters) - France’s GDF Suez on Friday agreed its first long-term liquefied natural gas (LNG) sales into Asia, signing a deal with Taiwan’s state-run energy firm CPC as regional demand for the commodity surges.

GDF Suez will deliver 800,000 tonnes of LNG per year to CPC over a 20-year period starting in 2018. The gas will be sourced from the proposed Cameron LNG plant in the United States where the French energy giant owns 4 million tonnes of export capacity per year.

The company has also signed other as-yet unannounced deals to export U.S. LNG to companies in Japan, China and Chile among others, which were first reported by Reuters in January.

“This sales agreement, the first of its kind, will contribute to export natural gas - including shale gas - produced in the U.S. - to the global LNG market,” GDF Suez’s global gas and LNG head Jean-Marie Dauger said.

Countries across the world have been quietly signing deals in recent months to import natural gas from the United States, revealing a growing appetite for the fuel overseas as domestic output soars.


While Asian spot prices for LNG have hit record highs this winter as demand outstrips supply, buyers of long-term volumes are driving an increasingly hard bargain with sellers given the surge of new supply due to emerge this decade from North America, Australia and east Africa.

Long-term LNG supply deals currently being negotiated are getting cheaper while industry sources say that GDF’s deal with CPC was done at barely breakeven levels.

According to the price formula reviewed by sources, CPC will pay around $12 per million British thermal units for the gas in the first year of the contract, a steep discount to the $16 it pays for LNG prices in Asia linked to oil.

Japan’s Mitsubishi and Mitsui, also with export rights at Cameron, have separately targeted major buyers such as Spain’s Repsol, France’s Total and Japanese utilities. Mitsubishi is to sell a significant chunk of LNG to its own trading arm in Singapore.

The Cameron LNG export project has received conditional approvals from the U.S. Department of Energy and is likely to gain final approval in the course of this year, GDF said.

GDF Suez says it is the main LNG importer in Europe and has the third-largest LNG supply portfolio in the world, supplied from six different countries. It controls a fleet of 14 LNG carriers and has a significant presence in regasification terminals around the world. (Reporting by Geert De Clercq and Oleg Vukmanovic; editing by William Hardy and Keiron Henderson)

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