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Released May 06, 2022 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--After wrapping up several growth projects recently, midstream company Energy Transfer LP (NYSE:ET) (Dallas, Texas) is advancing with other activities, notably making sales and purchase agreements for its planned liquefied natural gas (LNG) production and export plant in Lake Charles, Louisiana, and shifting its sights toward petrochemicals.
As Europe attempts to wean itself off Russian natural gas, the world's energy dynamics are changing, and European demand for U.S. LNG is very strong. For some time, Energy Transfer has been planning an LNG production facility in Lake Charles. In early February, before Russia's invasion of Ukraine, Energy Transfer asked the U.S. Federal Energy Regulatory Commission (FERC) for a three-year extension to its permit to build the plant, enabling it to extend the plant's construction through late 2028. However, the current situation in Europe may be encouraging Energy Transfer to reconsider its proposed deferral.
In the first quarter of 2022, the company entered into sales and purchase agreements with ENN Energy Holdings (Langfang, China) and ENN Natural Gas for a combined 2.7 million metric tons per year of LNG from the Lake Charles plant, for a period of 20 years. Earlier this week, Gunvor Group (Geneva, Switzerland) signed a contract for 2 million metric tons for 20 years. Also this week, Energy Transfer announced another sales and purchase agreement with South Korea's SK Gas Trading LLC (Gyeonggi) for 400,000 metric tons per year for 18 years.
Energy Transfer said first deliveries from the plant were planned for 2026, putting it on track to kick off construction next year. In a Wednesday earnings conference call with analysts, Chief Financial Officer Tom Long said, "We are also in active negotiations with a number of other high qualified customers, and we expect to make an announcement of additional offtake agreements in the weeks ahead." A final investment decision (FID) on the project is expected toward the end of the year. Subscribers to Industrial Info's Global Market Intelligence (GMI) Production Project Database can click here for related reports.
Energy Transfer also has found quite a comfortable niche in global ethane markets. Long said the company loaded approximately 8 million barrels from its export terminal in Nederland, Texas, in the first quarter, which is expected to increase as the year progresses. Ethane shipments from the terminal are expected to be 40 million barrels for 2022, increasing to up to 60 million barrels in 2023.
Long said: "In total, we continue to export more NGLs (natural gas liquids) than any other company or country, and our percentage of worldwide NGL export remain at nearly 20% of the world market. We are seeing long-term increases in NGL demand and market value both here in the U.S. as well as internationally." Long said the company was looking at possibly its export terminals in either Nederland or Marcus Hook, Pennsylvania.
And Energy Transfer is looking to move further down the ethane value chain, with an ethylene-focused acquisition and a possible petrochemical facility. In March, the company acquired an ethylene storage and transportation header system located between its terminals in Nederland and Mont Belvieu, Texas. The header system is connected to multiple ethylene pipeline systems. Long said the asset had two active storage caverns and one under development, with the potential to develop more.
"We believe this system will play a major role in connecting ethylene supply in markets along the Texas and Louisiana Gulf Coast as we are seeing significant and unprecedented interest for many of the petchem players in utilizing not only the storage facilities but also the ethylene header system," Long said.
With its access to ethane, Energy Transfer could become an ethylene producer itself, with a potential petrochemical plant along the U.S. Gulf Coast. Long said: "If we are able to reach FID, we believe that our cracker will be a very unique world-class facility, providing unparalleled access to the lowest-cost feedstock through our pipeline systems, as well as unparalleled access to downstream domestic and international ethylene and propylene markets through our pipelines, our storage facilities, and our export terminal."
As Energy Transfer moves outside of its traditional boundaries, it remains active in the types of projects it has focused on in the past. The company is wrapping up construction of an eighth NGL fractionator at its complex in Mont Belvieu. The 150,000-barrel-per-day (BBL/d) fractionator will bring Energy Transfer's fractionation capacity at Mont Belvieu to 1.05 million BBL/d. Subscribers can click here for the project report.
The company's 200 million-cubic-foot-per-day Grey Wolf cryogenic gas processing plant in Texas' Delaware Basin is expected to begin operations this year. Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Project Database can read more in a detailed project report.
Energy Transfer's 2022 growth capital forecast includes plans for construction of another processing plant this year. This could potentially take the form of a fourth train at its Arrowhead complex near Coyanosa, Texas, where a 200 million-cubic-foot-per-day train would boost site capacity to 800 million cubic feet per day. Subscribers can learn more from Industrial Info's project report.
On the pipeline front, construction is underway on Energy Transfer's 134-mile, 42-inch-diameter Gulf Run natural gas pipeline in Louisiana, among other projects. The Gulf Run line will carry up to 1.65 billion cubic feet per day (Bcf/d), and it is backed by a 20-year commitment for 1.1 Bcf/d from Golden Pass LNG (Houston, Texas). The pipeline is expected to be completed by the end of this year. Subscribers to Industrial Info's Pipeline Project Database can click here for a list of related reports.
Industrial Info Resources (IIR) is the world's leading provider of market intelligence across the upstream, midstream and downstream energy markets and all other major industrial markets. IIR's Global Market Intelligence Platform (GMI) supports our end-users across their core businesses, and helps them connect trends across multiple markets with access to real, qualified and validated project opportunities. Follow IIR on: LinkedIn.
As Europe attempts to wean itself off Russian natural gas, the world's energy dynamics are changing, and European demand for U.S. LNG is very strong. For some time, Energy Transfer has been planning an LNG production facility in Lake Charles. In early February, before Russia's invasion of Ukraine, Energy Transfer asked the U.S. Federal Energy Regulatory Commission (FERC) for a three-year extension to its permit to build the plant, enabling it to extend the plant's construction through late 2028. However, the current situation in Europe may be encouraging Energy Transfer to reconsider its proposed deferral.
In the first quarter of 2022, the company entered into sales and purchase agreements with ENN Energy Holdings (Langfang, China) and ENN Natural Gas for a combined 2.7 million metric tons per year of LNG from the Lake Charles plant, for a period of 20 years. Earlier this week, Gunvor Group (Geneva, Switzerland) signed a contract for 2 million metric tons for 20 years. Also this week, Energy Transfer announced another sales and purchase agreement with South Korea's SK Gas Trading LLC (Gyeonggi) for 400,000 metric tons per year for 18 years.
Energy Transfer said first deliveries from the plant were planned for 2026, putting it on track to kick off construction next year. In a Wednesday earnings conference call with analysts, Chief Financial Officer Tom Long said, "We are also in active negotiations with a number of other high qualified customers, and we expect to make an announcement of additional offtake agreements in the weeks ahead." A final investment decision (FID) on the project is expected toward the end of the year. Subscribers to Industrial Info's Global Market Intelligence (GMI) Production Project Database can click here for related reports.
Energy Transfer also has found quite a comfortable niche in global ethane markets. Long said the company loaded approximately 8 million barrels from its export terminal in Nederland, Texas, in the first quarter, which is expected to increase as the year progresses. Ethane shipments from the terminal are expected to be 40 million barrels for 2022, increasing to up to 60 million barrels in 2023.
Long said: "In total, we continue to export more NGLs (natural gas liquids) than any other company or country, and our percentage of worldwide NGL export remain at nearly 20% of the world market. We are seeing long-term increases in NGL demand and market value both here in the U.S. as well as internationally." Long said the company was looking at possibly its export terminals in either Nederland or Marcus Hook, Pennsylvania.
And Energy Transfer is looking to move further down the ethane value chain, with an ethylene-focused acquisition and a possible petrochemical facility. In March, the company acquired an ethylene storage and transportation header system located between its terminals in Nederland and Mont Belvieu, Texas. The header system is connected to multiple ethylene pipeline systems. Long said the asset had two active storage caverns and one under development, with the potential to develop more.
"We believe this system will play a major role in connecting ethylene supply in markets along the Texas and Louisiana Gulf Coast as we are seeing significant and unprecedented interest for many of the petchem players in utilizing not only the storage facilities but also the ethylene header system," Long said.
With its access to ethane, Energy Transfer could become an ethylene producer itself, with a potential petrochemical plant along the U.S. Gulf Coast. Long said: "If we are able to reach FID, we believe that our cracker will be a very unique world-class facility, providing unparalleled access to the lowest-cost feedstock through our pipeline systems, as well as unparalleled access to downstream domestic and international ethylene and propylene markets through our pipelines, our storage facilities, and our export terminal."
As Energy Transfer moves outside of its traditional boundaries, it remains active in the types of projects it has focused on in the past. The company is wrapping up construction of an eighth NGL fractionator at its complex in Mont Belvieu. The 150,000-barrel-per-day (BBL/d) fractionator will bring Energy Transfer's fractionation capacity at Mont Belvieu to 1.05 million BBL/d. Subscribers can click here for the project report.
The company's 200 million-cubic-foot-per-day Grey Wolf cryogenic gas processing plant in Texas' Delaware Basin is expected to begin operations this year. Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Project Database can read more in a detailed project report.
Energy Transfer's 2022 growth capital forecast includes plans for construction of another processing plant this year. This could potentially take the form of a fourth train at its Arrowhead complex near Coyanosa, Texas, where a 200 million-cubic-foot-per-day train would boost site capacity to 800 million cubic feet per day. Subscribers can learn more from Industrial Info's project report.
On the pipeline front, construction is underway on Energy Transfer's 134-mile, 42-inch-diameter Gulf Run natural gas pipeline in Louisiana, among other projects. The Gulf Run line will carry up to 1.65 billion cubic feet per day (Bcf/d), and it is backed by a 20-year commitment for 1.1 Bcf/d from Golden Pass LNG (Houston, Texas). The pipeline is expected to be completed by the end of this year. Subscribers to Industrial Info's Pipeline Project Database can click here for a list of related reports.
Industrial Info Resources (IIR) is the world's leading provider of market intelligence across the upstream, midstream and downstream energy markets and all other major industrial markets. IIR's Global Market Intelligence Platform (GMI) supports our end-users across their core businesses, and helps them connect trends across multiple markets with access to real, qualified and validated project opportunities. Follow IIR on: LinkedIn.
