Energy Transfer, a US energy trader, has announced a trio of long-term liquified natural gas (LNG) offtake agreements.
The three binding heads of agreement (HOAs) will see a total of 3.6 million tonnes per year (mtpa) to be exported across Asia and the US.
The first HOA, agreed with an unnamed Japanese consortium, is a 20-year deal for the supply of 1.6mtpa of LNG. The deal includes the option to convert the offtake arrangement into an equity participation, with the same amount of LNG provided.
The second involves natural gas provided to Energy Transfer by US company Cheasapeake Energy Marketing for the creation of 1mtpa of LNG which, post liquefaction, will be sold to Guvnor Singapore Energy for a 15-year offtake period. The price of the LNG will be fixed to the Japan Korea Marker spot price for the deal’s duration.
The final HOA, signed with an unnamed US-based company, is for 1mtpa over a 15-year term as part of a tolling agreement. This means that all natural gas is provided by and the property of the purchasing company, Energy Transition will only process the gas.
The offtake deals will see the LNG provided by the company’s Lake Charles LNG project, which is currently under construction. The project was initially set to complete construction by 2025, however; the project has encountered numerous legal complications that have threatened its completion.
The US Department of Energy (DOE) denied an extension to Energy Transfer for the project. The DOE stated that the project did not meet the requirements, namely extenuating circumstances, that would necessitate the proposed three-year extension. An appeal was also denied.
Energy Transfer, for its part, stated that it will continue to construct the project regardless of the rejection, as the DOE stated it may consider another appeal by the company if the project fails to meet its 2025 deadline.
“We are pleased with the continued confidence of our customers in the Lake Charles LNG project,” said Tom Mason, president of Lake Charles LNG. “These HOAs are important for the successful development of the project, along with the continuation of certain pre-FID work with one of our EPC contractors.”
