Energy Transfer LNG Export will supply 2.1 million tonnes of LNG per annum (mtpa) to Shell for 20 years from its proposed Lake Charles LNG project
Energy Transfer signs 20-year LNG sale and purchase agreement with Shell (Credit: AntonioMartin/ commons.wikimedia.org).
Energy Transfer LNG Export, a subsidiary of US-based midstream energy company Energy Transfer, has signed an LNG sale and purchase agreement (SPA) with Shell.
As agreed, the company will supply 2.1 million tonnes of LNG per annum (mtpa) to Shell for 20 years from its proposed Lake Charles LNG project.
It will make the supplies on a free-on-board (FOB) basis with the purchase price indexed to the Henry Hub benchmark along with a fixed liquefaction charge.
The SPA is contingent upon Energy Transfer LNG taking a final investment decision (FID) and other conditions.
The planned Lake Charles LNG export facility on the Gulf coast has received all necessary permissions. It has also received authorisations from the Federal Energy Regulatory Commission as well as approval from the Department of Energy to export.
Energy Transfer LNG president Tom Mason said: “We believe that Lake Charles is the most competitive LNG project on the Gulf Coast.
“And we are particularly pleased that one of the most prominent LNG industry participants has selected Lake Charles LNG as a supplier.
“We have had a long-standing relationship with Shell and its predecessor BG Group, as a customer of our regasification facility at Lake Charles. It is great to have Shell re-engaged in the project as a LNG offtake customer.”
Energy Transfer’s Lake Charles LNG facility will be developed on the existing brownfield regasification facility site. It will utilise four existing LNG storage tanks, two deep water berths and other LNG infrastructure.
The facility will also have a direct connection to Energy Transfer’s existing Trunkline pipeline system that is linked to multiple intrastate and interstate pipelines.
Shell Energy Marketing executive vice-president Steve Hill said: “We are very happy to be working once again with Energy Transfer and adding Lake Charles volumes to our global LNG supply portfolio.
“This agreement will enable us to further meet the increasing demand for LNG and positions Shell as a leading buyer of LNG from the US – which in 2021 became the world’s biggest LNG supplier.”
Over the last five months, Energy Transfer LNG has announced six SPAs related to its Lake Charles LNG export facility including one with China Gas Holdings Limited.