Energy Transfer, Chevron ink long-term Lake Charles LNG deal

Energy Transfer LNG, has entered into a 20-year LNG sale and purchase agreement (SPA) with Chevron U.S.A., according to a statement by Energy Transfer.

Under the SPA, Energy Transfer’s unit will supply 2 million tonnes of LNG per annum (mtpa) to Chevron.

Energy Transfer said the LNG supplies will be delivered on a free-on-board (FOB) basis and the purchase price will consist of a fixed liquefaction charge and a gas supply component indexed to the Henry Hub benchmark.

The obligations of Energy Transfer LNG under the SPA are subject to Energy Transfer LNG taking a final investment decision (FID) as well as the satisfaction of other conditions precedent, it said.

“We are pleased that one of the most prominent LNG industry participants has selected Lake Charles LNG as a supplier,” said Tom Mason, president of Energy Transfer.

“We believe that Lake Charles is the most compelling LNG project on the Gulf Coast and we continue to make significant progress towards full commercialization of this project,” he said.

LNG deals

Energy Transfer’s Lake Charles LNG project seeks to convert its existing regasification terminal to an LNG export facility.

It has a proposed liquefaction capacity of 16.45 mtpa and includes three trains and also modifications to the Trunkline Gas pipeline.

Energy Transfer previously said it had entered into definitive long-term LNG offtake contracts for 7.9 mtpa of LNG.

The company announced six SPAs during 2022 and the customers include China Gas, Gunvor, ENN, SK Gas, and Shell.

In July last year, the company also entered into three non-binding HOAs related to the long-term LNG offtake from this project for an aggregate of 3.6 mtpa of LNG.

One of the deals is with Chesapeake and Gunvor, the second deal is with EQT, and the third HOA is with a Japanese customer.

DOE approval

Earlier this year, Energy Transfer’s unit Lake Charles Exports asked the US DOE for expedited action on its pending application for non-FTA LNG exports from the proposed Lake Charles LNG export facility.

In August 2023, Energy Transfer’s unit Lake Charles Exports (LTE) filed an application with the DOE for a new export authorization for the Lake Charles LNG export terminal after the department declined Lake Charles LNG’s request to extend the deadline to start exports by December 2028.

This new request by LTE followed a decision by a federal district judge in Louisiana to block a decision by the Biden administration on issuing non-FTA LNG export permits for new projects.

DOE just released its study on the economic and climate impacts of exporting increasing volumes of LNG from the US.

The study will have a 60-day comment period that will begin once published in the Federal Register.