Chevron to Take LNG From Proposed Lake Charles Facility

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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Energy Transfer LP (NYSE:ET) (Dallas, Texas) on Friday pushed its Lake Charles export facility for liquefied natural gas (LNG) closer to reality with a supply-side agreement with U.S. supermajor Chevron Corporation (NYSE:CVX) (San Ramon, California).

The company's subsidiary Energy Transfer LNG Export LLC signed a 20-year agreement to supply Chevron with 2 million metric tons of LNG per year.

"We are pleased that one of the most prominent LNG industry participants has selected Lake Charles LNG as a supplier," Tom Mason, the president of Energy Transfer LNG, said Friday. "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."

Energy Transfer in October signed preliminary contracts with Technip Energies (Nanterre, France) and KBR Incorporated (NYSE:KBR) (Houston, Texas) to help build the proposed LNG export facility in Louisiana, though those are subject to a final investment decision (FID) on the project.

Energy Transfer has worked to get Lake Charles moving since 2015, but has so far struggled to secure enough supply agreements to move forward. Last year, however, it signed three non-binding heads of agreement deals that cover long-term supplies from Lake Charles, the largest of which was a 20-year agreement for 1.6 million metric tons per year for a Japanese consortium.

The proposed Lake Charles facility received a five-year extension from the Federal Energy Regulatory Commission in 2019 to build the LNG export facility at Energy Transfer's existing regasification facility in Lake Charles, Louisiana.

If fully sanctioned through a positive FID, Lake Charles would have a nameplate liquefaction capacity of 16.45 million metric tons per year. Subscribers to Industrial Info's Global Market Intelligence (GMI) Project Database can learn more by viewing the related project reports.

Outgoing U.S. President Joe Biden in a court-suspended order pushed the pause button on new LNG export facilities while the administration looked at the environmental impact. Methane is the main component of natural gas, but it's also a potent greenhouse gas that could be emitted up and down the LNG supply chain.

President-elect Donald Trump has vowed to overturn the order, advocating for more fossil fuels instead. The United States is already the world leader in crude oil and natural gas production, as well as exports of LNG.

Currently, there are four LNG facilities under construction, the largest of which is the Plaquemines facility in Louisiana. That facility, operated by Venture Global, just recently started receiving feedgas for liquefaction. Subscribers can learn more by viewing the project report.

There are currently eight LNG export facilities in operation in the United States. Cheniere Energy Incorporated (Houston, Texas) Sabine Pass terminal in Louisiana is the largest by volume, with 4.5 billion cubic feet per day (Bcf/d) in processing capacity.

There were 94 billion cubic feet of gas in the liquid form leaving U.S. export terminals over the seven-day period ending December 18. The federal government expects LNG exports to average 12 Bcf/d in 2024 and jump to 14 Bcf/d by next year.

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) 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 over 200,000 current and future projects worth $17.8 Trillion (USD).