Energy Transfer Signs 20-Year LNG Deal with Chevron
U.S. pipeline operator Energy Transfer announced a significant milestone on Thursday as its unit, Energy Transfer LNG, entered into a 20-year LNG sale and purchase agreement with oil and gas giant Chevron. The agreement entails the supply of 2.0 million tonnes per annum (mtpa) of LNG from the Lake Charles project in Louisiana.
The Lake Charles project has been in development since 2015, and this deal with Chevron marks a crucial step towards its full commercialization. Tom Mason, president of Energy Transfer LNG, expressed confidence in the project, stating, “We believe that Lake Charles is the most compelling LNG project on the Gulf Coast, and we continue to make significant progress towards full commercialization of this project.”
One of the key advantages of the Lake Charles project is its direct connection to Energy Transfer’s Trunkline pipeline, providing access to various basins such as the Haynesville, Permian, and Marcellus Shale. This strategic infrastructure integration enhances the project’s competitiveness and market appeal.
As per the terms of the agreement, the LNG supply will be on a free-on-board (FOB) basis, with the purchase price comprising a fixed liquefaction charge and a gas supply component indexed to the Henry Hub benchmark. This pricing mechanism aligns with industry standards and ensures a fair and transparent transaction process.
This deal underscores Energy Transfer’s commitment to expanding its LNG portfolio and strengthening its position in the global energy market. By partnering with Chevron, a leading player in the industry, Energy Transfer aims to leverage its operational expertise and strategic assets to deliver reliable and cost-effective LNG solutions.
With the Lake Charles project gaining momentum and securing long-term off-take agreements, Energy Transfer is poised for growth and success in the dynamic LNG market. The company’s focus on innovation, sustainability, and customer satisfaction will drive its continued success in the evolving energy landscape.
(Source: Reuters – Reporting by Pooja Menon in Bengaluru; Editing by Vijay Kishore)