Proposed Texas LNG Facility Gets Preliminary Offtake Agreement

Researched by Industrial Info Resources (Sugar Land, Texas)--Texas LNG Brownsville, a subsidiary of Glenfarne Group LLC (New York, New York), has entered into a "heads of agreement" (typically non-binding) to provide EQT Corporation (NYSE:EQT) (Pittsburgh, Pennsylvania), the biggest U.S. natural gas producer, with liquefied natural gas (LNG) from the proposed Texas LNG project at the Port of Brownsville, Texas.

Glenfarne, a developer, owner, and operator of energy transition infrastructure, is Texas LNG's majority owner and managing member.

The 15-year tolling agreement is preliminary and "final terms remain subject to negotiation of a definitive agreement between the parties," EQT said in a press release; the recently entered agreement is for 500,000 tons per annum (MTPA) of LNG from the first train at the planned 4-MTPA complex.

Glenfarne said it expects a financial close and construction to begin in 2024, with commercial operations in late 2027 or early 2028.

Construction entails building a liquefaction plant and its first train (Phase I) designed to convert 275 million standard cubic feet per day of natural gas (MMSCFD) into 2 million MTPA of LNG; a proposed Phase II would double capacity.

Meanwhile, an accompanying pretreatment unit will process 550 MMSCFD of natural gas from the Agua Dulce Hub in Nueces County, which serves as the supply point for several pipelines that cross the U.S.-Mexico border. Technip Energies N.V. (Paris, France) and Samsung Engineering America Incorporated (Houston, Texas) are providing joint engineering, procurement and construction (EPC) services on the project, while Baker Hughes Company (NASDAQ:BKR) (Houston) has agreed to provide compressor technology, maintenance and other technological services.

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"We are proud to welcome EQT as a customer and partner for Texas LNG, with our industry-leading low-emissions facility liquefying U.S. natural gas for global markets," said Brendan Duval, Glenfarne chief executive officer, in a press release.

For information on EQT's October earnings statement and the company's capital development, see November 8, 2023, article - Lower Natural Gas Prices Drag Down Earnings for Four Independent Drillers.

Glenfarne also is the sole owner and developer of the 8.8-MTPA Magnolia LNG project in Lake Charles, Louisiana, next to the Calcasieu Ship Channel--which connects Lake Charles, Louisiana to the Gulf of Mexico. The project entails constructing four production trains and a pretreatment unit to process 1.4 billion cubic feet per day of natural gas.

The project remains in its early exploration phases, where plenty of factors can alter, delay or eliminate the proposed investment, but the project has been approved by the Federal Energy Regulatory Commission (FERC), and the U.S. Department of Energy for export to both free trade agreement (FTA) countries, such as Canada and Mexico, as well as non-FTA countries. Subscribers can click here for related project reports.

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