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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.
In December 2024, Energy Transfer’s unit entered into a 20-year LNG sale and purchase agreement (SPA) with Chevron U.S.A.
Under the SPA, Energy Transfer LNG will supply 2 million tonnes of LNG per annum (mtpa) to Chevron, subject to Energy Transfer LNG taking FID on the project.
Energy transfer also needs to secure approval for non-FTA LNG exports.
Last 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 the meantime, US President Donald Trump lifted a moratorium by the former Biden administration on non-FTA LNG export permits last month.
Trump issued the executive order, which was widely expected, just hours after officially taking over his second four-year term as the president.
Energy Transfer’s co-CEO, Marshal McCrea, discussed the impact the new administration would have on Energy Transfer’s business and Lake Charles LNG on Tuesday during the company’s fourth-quarter conference call.
McCrea said the new administration “fully recognizes how blessed we are with not only fossil fuel resources but a lot of resources that are needed in this renewable push.”
“So, yes, needless to say, Energy Transfer and our executive team and the vast majority of our employees are very excited about what’s happening, and we think it’s going to be huge for our industry, huge for our partnership, and huge for this country and the world,” he said.
Lake Charles update
McCrea also provided an update on the Lake Charles LNG export project.
“We have a team over in London right now, had some really good reports back,” he said.
“So, as everybody knows, there are two things we’re kind of waiting for. It is to get a good, solid contract at the price that works and get that snowball going,” McCrea said.
He mentioned the recent Chevron LNG supply deal.
“They’re actually an advocate of ours now, had lunch with them last week. They do believe we have the best project, and they’re pushing others to really take a close look if they aren’t already looking at our project,” he said.
“We have over 20 million tons we’re negotiating with. We have a really strong equity partner that we’re now in negotiations with for a considerable amount of equity,” McCrea said.
“So, the stars are kind of lining. I mean, we’ve got a lot of work to do. We’re not going to undersell that. But we do have a project that’s in an excellent location with pipeline infrastructure, much of which is already there with a great terminal, with tanks that are already there, with this brownfield project,” he said.
“So, we’re very excited about it. We’re going to push hard, and we certainly hope to get to FID sometime probably in the fourth quarter of this year,” McCrea said.
Price talks
Besides the Chevron deal, 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 2023, 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.
During the call, McCrea also discussed these previous SPAs and the prices of these contracts.
“We don’t like those prices. So, yes, we are renegotiating those. Whether 8 or 9 million tons, we had negotiated,” he said.
He said Energy Transfer is in negotiations with “every one of those.”
“To my knowledge, not one of those has backed out yet. Everybody understands how costs have risen and we are in continued negotiations with those to renegotiate their fees as well as, as I mentioned earlier, numerous other customers that are more in today’s pricing realm of what works for our project,” McCrea said.