Cheniere Energy Partners, L.P. (NYSE: CQP) announced that its subsidiary Sabine Pass Liquefaction Stage V, LLC has entered into an engineering, procurement and construction contract with Bechtel Energy, Inc. for the first phase of the SPL Expansion Project.

The company issued a limited notice to proceed, allowing Bechtel to begin early engineering and procurement work on Phase 1. The contract covers construction of Train 7, a boil-off gas re-liquefaction unit, and supporting infrastructure at the existing Sabine Pass LNG Terminal in Cameron Parish, Louisiana.

Phase 1 is expected to have a total production capacity exceeding 6 million tonnes per annum of liquefied natural gas, including estimated debottlenecking opportunities. The broader SPL Expansion Project encompasses up to three large-scale liquefaction trains with expected total peak production capacity of approximately 20 million tonnes per annum.

The project requires regulatory approvals from the Federal Energy Regulatory Commission for authorization to site, construct and operate the facility. A Department of Energy application for LNG export authorization to non-free trade agreement countries remains pending. Cheniere Partners expects to reach a final investment decision on Phase 1 by early 2027, contingent on regulatory approvals and securing acceptable financing.

Phase 1 operations are supported by long-term agreements with creditworthy counterparties, according to the press release. Cheniere Partners currently operates the Sabine Pass LNG terminal with production capacity exceeding 30 million tonnes per annum of LNG and owns the Creole Trail Pipeline connecting the terminal to interstate and intrastate pipeline networks.