Dallas-based Energy Transfer LP has signed three long-term liquefied natural gas (LNG) agreements for its Lakes Charles LNG project, the company said in a news release.
The three non-binding heads of agreement (HOA) combine for 3.6 million metric tons per annum (mtpa) of LNG to be exported to customers in Asia and the US. HOAs are subject to the negotiation and execution of definitive agreements, Energy Transfer said.
The first HOA is with an unidentified Japanese consortium for the purchase of 1.6 mtpa for a term of 20 years, subject to the option to convert the offtake agreement into equity providing the same volume of LNG, according to the press release.
The second HOA is for Chesapeake Energy Marketing LLC to supply Lakes Charles LNG with volumes of natural gas sufficient to produce 1.0 mtpa of LNG over 15 years, after which Gunvor Singapore Pte Ltd would purchase LNG from Chesapeake at a price indexed to the Japan Korea Marker . for a period of 15 years, according to the press release.
The third HOA is with an unnamed US customer and “relates to a 1.0 mtpa toll agreement for a 15-year term,” Energy Transfer said.
“We are pleased with our customers’ continued confidence in the Lake Charles LNG project,” said Lake Charles LNG President Tom Mason. “These HOAs are important to the successful development of the project, along with the continuation of certain pre-FIDs [final investment decision] work with one of our EPCs [engineering, procurement, and construction] contractors”.
The Lake Charles LNG project did not meet the US Department of Energy’s (DOE) seven-year construction deadline for LNG export permits. In May, the DOE denied Energy Transfer’s request for a three-year extension of the project, saying it did not meet its criteria for granting second extensions. The company requested a new hearing, and in June the DOE said it would not hear the request again, saying it was not convinced by the company’s arguments. Energy Transfer had requested the extension in part because of a variation in the project’s design to include a significant carbon capture and sequestration (CCS) component, according to an earlier Reuters report.
According to the company’s website, the Lakes Charles project is for the development of a large-scale LNG export facility in Lake Charles, Louisiana, located in the Calcasieu Ship Channel. The project will convert Energy Transfer’s existing Lake Charles LNG import and regasification terminal into an LNG export facility, “providing a cost advantage over other proposed LNG projects on the Gulf Coast” .
The project is fully permitted for three liquefaction trains of 5.5 mtpa, which will use the existing infrastructure. The Lake Charles LNG Import and Regasification Terminal has approximately 15.1 million cubic feet (430,000 cubic meters) of above-ground LNG storage capacity, two deepwater docks capable of handling vessels with a of up to 7.66 million cubic feet (217,000 cubic meters) and a deepwater turning basin, according to the company’s website.
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