Energy Transfer Invites Partner to Help with Lake Charles LNG

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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Energy Transfer LP (NYSE:ET) (Dallas, Texas) said it signed an agreement with MidOcean Energy (Washington, D.C.) to work together on development of the planned Lake Charles liquefied natural gas (LNG) export facility in Louisiana.

Lake Charles is among the handful of facilities for exports of LNG emerging along the U.S Gulf Coast. Energy Transfer had worked to get Lake Charles moving since 2015, but struggled to secure enough supply agreements to move forward.

On Wednesday, the company heralded a heads of agreement (HOA) that means MidOcean would cover 30% of the construction costs in exchange for about 30% of total production of LNG.

If built, Lake Charles would be able to process up to 2.6 billion cubic feet per day (Bcf/d) of natural gas into LNG for exports.

"MidOcean considers Lake Charles LNG to be one of the most advantaged U.S. LNG projects under development," De la Rey Venter, the chief executive officer at MidOcean, said. "We look forward to a deep and fruitful multi-decade partnership with Energy Transfer."

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

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 contracts are subject to a final investment decision (FID) on the project.

The company signed a similar offtake agreement with Chevron Corporation (NYSE:CVX) (Houston, Texas) in December. The agreement with MidOcean, however, is non-binding. And while U.S. President Donald Trump is working to advance LNG, his volatile policies on tariffs could complicate future trade relationships. U.S. LNG exporters need a permit to send gas to countries without a free-trade agreement.

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

The United States has been the world leader in LNG exports since 2022, supported by the vast volumes of natural gas in the inland shale basins. Data from IIR Energy show natural gas production may be on the decline because of seasonal maintenance, though the amount of gas feeding the LNG export terminals hit a record on Wednesday at 17.1 Bcf/d, a 1.29 Bcf/d increase over the March average.

If sanctioned, Lake Charles could see construction kick off as early as December. It could be shipping LNG by 2029. Subscribers to Industrial Info's Global Market Intelligence (GMI) Project Database can learn more by viewing the related project reports.

"We are pleased to have MidOcean partner with us on our Lake Charles LNG project, and we believe its participation will provide a significant catalyst towards reaching positive FID," said Tom Mason, the president of Energy Transfer LNG.

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).