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During the company’s earnings call on Tuesday, Energy Transfer’s co-CEO, Tom Long, said that Energy Transfer is making “substantial” progress towards commercialization of the project.
He noted that Lake Charles LNG and MidOcean Energy, the LNG unit of US-based energy investor EIG, recently signed a heads of agreement, which provides a non-binding framework for the joint development of the LNG project.
Pursuant to the HOA, MidOcean would commit to fund 30 percent of the construction cost and be entitled to 30 percent of the LNG production.
In addition, Lake Charles LNG also signed new deals last month.
“In April, Lake Charles LNG signed a binding SPA (sales and purchase agreement) with a Japanese utility company for up to one mtpa,” Long said.
He said the agreement is subject to the approval of the board of this company, which is expected to be received by the end of May.
“Also in April, we signed an HoA (heads of agreement) with a German energy company for one mtpa,” Long said.
He did not reveal the names of the companies or other details regarding the contracts.
“Lake Charles LNG is in discussions for the remaining uncommitted LNG offtake volume and is targeting FID by year-end,” Long said.
More than 10.4 mtpa
Later during the call, Energy Transfer’s co-CEO, Marshal McCrea, also revealed that Energy Transfer signed another supply deal for Lake Charles LNG volumes.
“We continue to gain momentum and be excited about getting to FID. We’ve worked many, many years on this project. We’ve got teams over as we speak,” he said.
“In fact, even on this call moments ago, we got a text. We signed up another 1 million tons from a large international energy company. So we’re very excited,” McCrea said.
“However, we’ve still got work to do. We now pass 10.4 million tons. We’re targeting about 15 million tons,” he said.
Moreover, the company is looking for other partners, “where at the end of the day, we won about 75 percent to 80 percent equity and/or infrastructure partners still have that box to check.”
“We are finalizing our EPC cost over these next couple of months,” McCrea said.
In September last year, Energy Transfer executed an EPC agreement with a joint venture of France’s Technip Energies and US-based KBR.
He also noted that the company is “very excited about the new administration that will not hold up.”
So we’re excited about a lot of work to do and certainly hope we reach FID by the end of the year,” McCrea said.
Lake Charles LNG
Energy Transfer is seeking an extension of time from the US FERC to complete and place into service its Lake Charles LNG export facility.
In May 2022, FERC granted Lake Charles LNG and the accompanying pipeline the current extension of the deadline to complete construction and make the project available for service until December 2028.
Lake Charles LNG requests a three-year extension of time until December 31, 2031.
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 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.
Under the SPA, Energy Transfer LNG will supply 2 mtpa to Chevron, subject to Energy Transfer LNG taking FID on the project.
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.