Lake Charles LNG Suspended

Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)

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Summary

The developer of the proposed Lake Charles LNG facility said it was suspending further action on the project. If built, it would've been among the largest U.S. facilities for LNG exports.

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Open to Discussions

Energy Transfer (Dallas, Texas) said it was suspending its efforts to develop the proposed Lake Charles LNG facility in Louisiana to focus more on its midstream assets.

"Energy Transfer management has determined that its continued development of the project is not warranted by Energy Transfer but remains open to discussions with third parties who may have an interest in developing the project," the company said in a statement late Thursday.

The Lake Charles timeline is long. The company applied to the U.S. Federal Energy Regulatory Commission (FERC) for permission to construct the plant in 2012, just as Cheniere Energy (Houston, Texas) was making a final investment decision (FID) on what would become the first-ever export plant for liquefied natural gas (LNG) in the United States and the largest, Sabine Pass, located in Cameron Parish, Louisiana.

Initially authorized for construction three years after its FERC application, Energy Transfer applied for successive extensions, with the most recent coming in May that pushed the in-service date to 2031, a significant slippage. Last month, the company said it wouldn't pursue an FID on the project until 80% of the equity in Lake Charles was sold off.

The company managed to bring on a few partners, with MidOcean Energy (Houston) signing a non-binding commitment to take on 30% of the construction costs in exchange for 30% of the LNG produced.

If built, Lake Charles would have a nameplate capacity of 5.5 million metric tons per annum (MTPA) of LNG. That would have rivaled Sabine Pass, which currently has a nameplate capacity of 5.2 MTPA.

Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Project and Plant databases can learn more about Lake Charles LNG--including capacities, investment values and necessary equipment--in a list of detailed project reports and the plant profile.

Suspension Comes Despite Political Support

The suspension of Lake Charles LNG comes despite the efforts of President Donald Trump, who created a special council to advance projects in the fossil fuel sector. From Delfin LNG, a floating liquefied natural gas (FLNG) plant slated for offshore Louisiana, to Alaska LNG, a facility that would require complex pipeline construction through the Alaskan tundra, the Trump administration is working to capitalize on the U.S. position as the world leader in LNG exports.

Not all of them may make it to the finish line. And even with the political support, U.S. exports of LNG are expected to increase just over 9% from 2025 levels, with feed gas at 16.3 billion cubic feet per day (Bcf/d) expected next year. That compares with the 25% increase annually from year-ago levels.

Shorter term, and LNG deliveries are well above federal estimates. IIR Energy, in its NATGAS Today report for Friday, put feed gas levels at 18.2 billion cubic feet. Total U.S. natural gas production, meanwhile, is on pace for an increase of only 1.4% next year.

By the Numbers

• 2012 was when applications were submitted for construction
• 5.5 MTPA was expected from Lake Charles LNG
• 9% increase in LNG feed gas by next year

Key Takeaways

• Lake Charles LNG plans suspended.
• Energy Transfer to focus on midstream.
• This comes despite federal support for LNG.

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About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).