(Reuters) U.S. pipeline operator Energy Transfer LP said it agreed to supply 2.1 million tonnes of liquefied natural gas (LNG) per year to Shell Plc for 20 years.
The deal for supplies from its proposed Lake Charles, Louisiana, facility comes as demand and prices for LNG are soaring over Russia's February invasion of Ukraine. LNG prices at the Dutch hub in Europe this week hit $83 per million British thermal units (mmBtu), more than twice that of early March.
Shell was an original backer of the facility, which received U.S. permits in 2015 to produce 16.4 million tonnes per annum (MTPA) of the superchilled fuel. But the British oil giant quit the project two years ago as energy markets tumbled during the coronavirus pandemic.
Energy Transfer more recently has signed a string of agreements with potential buyers to supply about 8 MPTA. The Shell agreement anticipates first LNG deliveries under the contract as early as 2026. U.S. permits for the project were issued in 2015, but Energy Transfer has not yet reached a financial greenlight.
