Energy Transfer LP announced its subsidiary, Energy Transfer LNG, has entered into a 20-year LNG Sale and Purchase Agreement (SPA) with Chevron U.S.A. Inc. related to its Lake Charles LNG project.
Under the SPA, Energy Transfer LNG will supply 2.0 million tonnes of LNG per annum (mtpa) to Chevron. The LNG will be supplied 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.
“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 LNG. “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.”
“Chevron believes LNG plays an important role in meeting the world’s need for energy while helping advance lower carbon ambitions,” said Freeman Shaheen, President, Chevron Global Gas. “This new long-term agreement demonstrates our focus on increasing access to affordable, reliable, ever-cleaner energy supplies to meet growing global demand.”
The Lake Charles LNG export facility would be constructed on the existing brownfield regasification facility site and will capitalize on four existing LNG storage tanks, two deep water berths and other LNG infrastructure. Lake Charles LNG would also benefit from its direct connection to Energy Transfer's existing Trunkline pipeline system that in turn provides connections to multiple intrastate and interstate pipelines. These pipelines allow access to multiple natural gas producing basins, including the Haynesville, the Permian and the Marcellus Shale. Energy Transfer is one of the largest and most diversified midstream energy companies in North America, with a strategic footprint in all of the major U.S. production basins.
