Energy Transfer subsidiary Energy Transfer LNG Export has signed a long-term SPA with Chevron for the supply of LNG from its Lake Charles LNG project.
The 20-year SPA includes the supply of 2mtpa of LNG to Chevron.
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Under the terms of the SPA, Energy Transfer LNG will provide the LNG on a free-on-board (FOB) basis.
The pricing structure includes a fixed liquefaction charge and a component indexed to the Henry Hub benchmark, a widely used pricing point for natural gas.
The agreement’s execution is contingent upon Energy Transfer LNG making a final investment decision (FID) and meeting other conditions precedent.
Energy Transfer LNG president Tom Mason said: “We are pleased that one of the most prominent LNG industry participants has selected Lake Charles LNG as a supplier.
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By GlobalData“We believe that Lake Charles is the most compelling LNG project on the Gulf Coast, and we continue to make significant progress towards full commercialisation of this project.”
The planned Lake Charles LNG export facility will be developed on an existing brownfield regasification site.
The project will utilise the site’s current infrastructure, which includes four LNG storage tanks, two deep-water berths and other essential LNG handling facilities.
Chevron Global Gas president Freeman Shaheen said: “Chevron believes LNG plays an important role in meeting the world’s need for energy while helping advance lower carbon ambitions.
“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 project will benefit from its direct connection to Energy Transfer’s extensive Trunkline pipeline system.
This network provides links to multiple intrastate and interstate pipelines, granting access to several key natural gas-producing regions such as Haynesville, Permian and the Marcellus Shale.
Earlier this month, Energy Transfer announced the FID for a new $2.7bn intrastate natural gas pipeline connecting Permian Basin production to key markets and trading hubs.
The pipeline, previously called the Warrior pipeline, has been renamed the Hugh Brinson pipeline in recognition of Hugh Brinson. The first phase of the pipeline is expected to be operational by the end of 2026.
