Energy Transfer LP has executed a 20-year agreement to supply Shell NA LNG LLC with LNG from Energy Transfer LNG Export LLC’s Lake Charles liquefaction plant in Louisiana.
Shell will purchase 2.1 million tpy of LNG on a free-on-board (FOB) basis with the purchase price indexed to Henry Hub, plus a fixed liquefaction charge.
The agreement will become effective upon satisfaction of conditions precedent, including Energy Transfer taking final investment decision (FID), expected by yearend 2022. First deliveries are expected to begin as early as 2026.
The Lake Charles LNG project is fully permitted, having received authorizations from the Federal Energy Regulatory Commission as well as export authorizations from the Department of Energy. Liquefaction would be adjacent to Lake Charles LNG’s existing LNG terminal in Calcasieu Parish, La. and will capitalize on four existing LNG storage tanks, two deep water berths, and other LNG infrastructure.
The liquefaction plant will directly connect 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 Haynesville, Permian, and Marcellus shale.
Energy Transfer LNG has signed six LNG agreements in the last 5 months, bringing the total amount of LNG contracted from its Lake Charles LNG plant to nearly 8 million tpy (OGJ Online, May 2, 2022).