Energy Transfer pens 18-year LNG supply deal with South Korea’s SK Gas

Energy Transfer, the developer of the proposed Lake Charles LNG export facility in Louisiana, said it has signed a long-term supply deal with a unit of South Korea’s SK Gas.

This new contract comes just a day after Energy Transfer announced a deal with a unit of energy and LNG trader Gunvor. Prior to that, the firm also signed two long-term supply deals with Chinese independent gas distributor ENN.

Under the new SPA, Energy Transfer LNG, a unit of Energy Transfer, will supply 0.4 million tonnes per annum of LNG to SK Gas Trading on a free-on-board basis for a period of 18 years.

In addition, the Henry Hub-indexed deal would include a fixed liquefaction charge, Energy Transfer said in a statement on Tuesday.

Energy Transfer expects first deliveries to start as early as 2026.

The firm said the new deal would become fully effective upon the satisfaction of the conditions precedent, including taking FID. It plans to take FID by the end of this year.

5.1 mtpa of contracted LNG supply

Including the three prior deals, this new SPA brings the total amount of LNG contracted from its Lake Charles LNG export facility to 5.1 mtpa.

Energy Transfer’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 but also modifications to the Trunkline Gas pipeline.

On the other side, SK Gas Trading is the US trading entity of SK Gas and has been exporting and trading LPG out of US since 2015.

SK Gas, a unit of South Korean conglomerate SK Group, is expanding its business to include LNG by constructing an import terminal in Ulsan, Korea.

Construction of this terminal is expected to be complete by the end of 2024 and, upon commercial operation, will supply LNG for power generation but also industrial applications.

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