Energy Transfer signs three LNG offtake agreements for Lake Charles project (NYSE:ET) - Seeking Alpha
Energy Transfer signs three LNG offtake agreements for Lake Charles project (NYSE:ET) | Seeking Alpha
Energy Transfer signs three LNG offtake agreements for Lake Charles project
Energy Transfer LP (ET)
CHK By:
Carl Surran, SA News Editor
54 Comments CHUNYIP WONG/E+ via Getty Images
Energy Transfer (NYSE: ET) said Friday it entered into three long-term agreements to sell liquefied natural gas from its proposed Lake Charles LNG export project in Louisiana.
The three non-binding heads of agreement combine for 3.6M metric tons/year of LNG to be exported to customers in Asia and the U.S., the company said.
Energy Transfer ( ET) said the first HOA is with an unnamed Japanese consortium for the purchase of 1.6M tons/year for a 20-year term.
The second deal would see Chesapeake Energy ( CHK) supply Lake Charles LNG with enough volumes of gas to produce 1M tons/year for 15 years; after liquefaction, Swiss commodities trader Gunvor would buy LNG from Chesapeake at a price indexed to the Japan Korea Marker for 15 years.
The third HOA is with an unnamed U.S. customer and involves a tolling arrangement for 1M tons/year for 15 years, the company said.
Energy Transfer ( ET) announced the agreements even though the U.S. Department of Energy has so far refused to extend Lake Charles' authorization to sell LNG to non-Free Trade Agreement countries beyond December 2025.
More on Energy Transfer:
Related Knowledge Center: Liquefied natural gas
Driven by plentiful natural gas produced from shale plays, the United States began exporting liquefied natural gas in 2016 when the Sabine Pass terminal in Louisiana opened and shipped its first cargo. Since then, additional capacity, or trains, have been added to Sabine Pass, and terminals have become operational in Cameron Parish, La.; Hackberry, La.; Cove Point, Md.; and Corpus Christi, Texas. The Energy Information Administration projects that U.S. LNG export capacity will reach 8.9 billion cubic feet per day (Bcf/d) by the end of 2019, making it the third largest in the world, behind Australia and Qatar. The tariff war with China has the potential to impact some final investment decisions for additional terminals in the coming months.