Energy Transfer eyes Lake Charles LNG FID in Q2 2024

Texas-based Energy Transfer could take a final investment decision to build its Lake Charles LNG export facility in Louisiana in the second quarter of 2024, depending on the export approval by the US DOE, according to the company’s executives.

In August, Energy Transfer 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.

The company has entered into definitive long-term LNG offtake contracts for 7.9 mtpa of LNG.

Energy Transfer announced six SPAs during the last year and the customers include China Gas, Gunvor, ENN, SK Gas, and Shell.

In July this 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.

The company’s Lake Charles LNG project seeks to convert the company’s 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.

“Significant interest”

“We continue to see significant interest in our LNG capacity from US producers and international markets,” Energy Transfer’s co-CEO, Tom Long, told analysts on Wednesday during the company’s third-quarter conference call.

He said that the company is in negotiations with “several significant equity partners and are ultimately targeting retaining an interest of approximately 20 percent for Energy Transfer.”

These potential equity partners are also interested in “substantial volumes” of LNG offtake, Long said.

In addition, the company is in negotiations to finalize its EPC contract, he said.

“We are receiving tremendous support from domestic and international customers, community stakeholders, and other interested constituents who are actively encouraging the Department of Energy to approve our pending export authorization application on an expedited basis,” Long said.

Final decision

Answering a question about the final decision on the LNG export plant, Energy Transfer’s co-CEO Mackie McCrea said that “we really need to get the DOE to extend the permit.”

“We think they will. We’ve got, as we’ve said, a lot of folks involved behind the scenes, trying to make that happen, including other countries and other businesses,” McCrea said.

He said the company is “hopeful” that will have a response from the DOE by “sometime mid-first quarter”.

“We’re pushing and others are also pushing them to maybe do that sooner, but we don’t know,” he said.

“But in the meantime, Tom Mason and his team are working hard in fact over there now, trying to finalize a lot of these contracts and agreements around equity as well as new LNG offtakers,” he said.

He said that it is hard to predict when the company could take the final investment decision, but “if everything went exceptionally well, the second quarter could be a possibility,” McCrea said.

“But we’ll see how things go over the next three to four months,” he said.

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