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Released August 08, 2022 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Energy Transfer LP's (NYSE:ET) (Dallas, Texas) plans for a liquefied natural gas (LNG) production and export plant in Lake Charles, Louisiana, have been on the books for some time, but the company has previously asked U.S. regulators for extensions in the plant's construction. But that seems to be changing, and the plant may be seeing some action sooner rather than later.
The war in Ukraine has heated up the demand for LNG in Europe as countries there attempt to wean themselves from Russian natural gas. U.S. LNG producers, such as Cheniere Energy Incorporated (Houston, Texas), have reported increased cargoes and bumper profits this year. And Energy Transfer wants a piece of the action. The company has made several LNG sales and purchase agreements this year for LNG from the Lake Charles plant.
In last week's earnings conference call with analysts, Chief Financial Officer Tom Long said that, year to date, Energy Transfer had executed five LNG offtake agreements for an aggregate of 5.8 million tons per year. Long said, "We're also in active negotiations with a number of other high-quality customers as we expect to make announcements of additional offtake agreements in the weeks ahead. ... We continue to work toward achieving FID [final investment decision] for this project by the end of this year, and we expect that our anticipated announcements of additional long-term LNG offtake agreements over the next several weeks will keep us on track for meeting this objective."
The company expects to finance a significant portion of the capital cost of the project, which Industrial Info estimates to be about $9 billion, by means of sale of equity in the project to infrastructure funds and possibly to industry participants in conjunction with offtake agreements.
Long said, "Recent events in Europe highlight the importance of LNG from the United States, a country with abundant natural gas supply and government support for LNG exports. These events have caused companies around the world to place increased importance on long-term security of natural gas supply. We believe that our Lake Charles LNG project will be a significant factor in the long-term solutions for global energy needs." If all three planned production trains of the plant are built, the Lake Charles facility will be able to produce 15 million tons per year of LNG.
Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Project Database can click here for reports on the project.
Energy Transfer also is at work to supply gas for the LNG exports of other companies. The company is underway with construction of its Gulf Run natural gas pipeline, which will provide gas transportation between the Haynesville Shale and the U.S. Gulf Coast. The pipeline is backed by a 20-year commitment for 1.1 billion cubic feet per day from Golden Pass LNG (Houston), a joint venture of Exxon Mobil Corporation (NYSE:XOM) (Irving, Texas) and QatarEnergy (Doha, Qatar), which is constructing an LNG export facility in Sabine Pass, Texas. Subscribers can click here for the Gulf Run project report and here for related reports on the Golden Pass facility.
Energy Transfer itself already is a major player in the energy export market, exporting more natural gas liquids (NGLs), particularly ethane, than any other company or country in the world, cornering about 20% of the world market. Long said that for full-year 2022, the company expected to load about 40 million barrels of ethane and expected this to go as high as 60 million barrels in 2023. This may be paving way for further project opportunities at its ethane export terminals in Nederland, Texas, and Marcus Hook, Pennsylvania. Long said, "We continue to see increase in NGL demand, both in the U.S. as well as from overseas customers seeking additional supply from the U.S., and we have sufficient commitments to move forward on an ethane export expansion. Even though we expect to expand our ethane export capabilities at both our Marcus Hook and Nederland terminals, these commitments provide us with the optionality of initially expanding at either terminal." Subscribers can click here for the report on a potential expansion at Marcus Hook.
Apart from export-related projects, Energy Transfer also is working on increasing its NGL fractionation. Construction of an eighth fractionator at the company's complex in Mont Belvieu, Texas, was paused in 2020 with the onset of the COVID-19 pandemic. However, work on the fractionator recently resumed, with engineering, procurement and construction contractors S&B Engineers and Constructors Limited (Houston) expected to complete work in the third quarter of next year. This will bring Energy Transfer's fractionation capacity at the complex to 1.05 million barrels per day (BBL/d). Subscribers can click here for the project report.
In the Permian Basin, Energy Transfer is constructing its Grey Wolf cryogenic gas processing plant near Wink, Texas. The facility will be able to process approximately 230 million cubic feet per day of natural gas and produce 16,000 BBL/d of NGLs. It is expected to be in service by the end of this year. Long said that in the second quarter, Energy Transfer's Permian Basin plant inlet processing volumes were approximately 2.2 billion cubic feet per day, a new record. Subscribers can click here for the Grey Wolf project report. Long said that given customer demand, the company was evaluating constructing another processing plant in the region.
Click here for a look at all of the projects discussed in this article, and here for the plant profiles.
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.
The war in Ukraine has heated up the demand for LNG in Europe as countries there attempt to wean themselves from Russian natural gas. U.S. LNG producers, such as Cheniere Energy Incorporated (Houston, Texas), have reported increased cargoes and bumper profits this year. And Energy Transfer wants a piece of the action. The company has made several LNG sales and purchase agreements this year for LNG from the Lake Charles plant.
In last week's earnings conference call with analysts, Chief Financial Officer Tom Long said that, year to date, Energy Transfer had executed five LNG offtake agreements for an aggregate of 5.8 million tons per year. Long said, "We're also in active negotiations with a number of other high-quality customers as we expect to make announcements of additional offtake agreements in the weeks ahead. ... We continue to work toward achieving FID [final investment decision] for this project by the end of this year, and we expect that our anticipated announcements of additional long-term LNG offtake agreements over the next several weeks will keep us on track for meeting this objective."
The company expects to finance a significant portion of the capital cost of the project, which Industrial Info estimates to be about $9 billion, by means of sale of equity in the project to infrastructure funds and possibly to industry participants in conjunction with offtake agreements.
Long said, "Recent events in Europe highlight the importance of LNG from the United States, a country with abundant natural gas supply and government support for LNG exports. These events have caused companies around the world to place increased importance on long-term security of natural gas supply. We believe that our Lake Charles LNG project will be a significant factor in the long-term solutions for global energy needs." If all three planned production trains of the plant are built, the Lake Charles facility will be able to produce 15 million tons per year of LNG.
Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Project Database can click here for reports on the project.
Energy Transfer also is at work to supply gas for the LNG exports of other companies. The company is underway with construction of its Gulf Run natural gas pipeline, which will provide gas transportation between the Haynesville Shale and the U.S. Gulf Coast. The pipeline is backed by a 20-year commitment for 1.1 billion cubic feet per day from Golden Pass LNG (Houston), a joint venture of Exxon Mobil Corporation (NYSE:XOM) (Irving, Texas) and QatarEnergy (Doha, Qatar), which is constructing an LNG export facility in Sabine Pass, Texas. Subscribers can click here for the Gulf Run project report and here for related reports on the Golden Pass facility.
Energy Transfer itself already is a major player in the energy export market, exporting more natural gas liquids (NGLs), particularly ethane, than any other company or country in the world, cornering about 20% of the world market. Long said that for full-year 2022, the company expected to load about 40 million barrels of ethane and expected this to go as high as 60 million barrels in 2023. This may be paving way for further project opportunities at its ethane export terminals in Nederland, Texas, and Marcus Hook, Pennsylvania. Long said, "We continue to see increase in NGL demand, both in the U.S. as well as from overseas customers seeking additional supply from the U.S., and we have sufficient commitments to move forward on an ethane export expansion. Even though we expect to expand our ethane export capabilities at both our Marcus Hook and Nederland terminals, these commitments provide us with the optionality of initially expanding at either terminal." Subscribers can click here for the report on a potential expansion at Marcus Hook.
Apart from export-related projects, Energy Transfer also is working on increasing its NGL fractionation. Construction of an eighth fractionator at the company's complex in Mont Belvieu, Texas, was paused in 2020 with the onset of the COVID-19 pandemic. However, work on the fractionator recently resumed, with engineering, procurement and construction contractors S&B Engineers and Constructors Limited (Houston) expected to complete work in the third quarter of next year. This will bring Energy Transfer's fractionation capacity at the complex to 1.05 million barrels per day (BBL/d). Subscribers can click here for the project report.
In the Permian Basin, Energy Transfer is constructing its Grey Wolf cryogenic gas processing plant near Wink, Texas. The facility will be able to process approximately 230 million cubic feet per day of natural gas and produce 16,000 BBL/d of NGLs. It is expected to be in service by the end of this year. Long said that in the second quarter, Energy Transfer's Permian Basin plant inlet processing volumes were approximately 2.2 billion cubic feet per day, a new record. Subscribers can click here for the Grey Wolf project report. Long said that given customer demand, the company was evaluating constructing another processing plant in the region.
Click here for a look at all of the projects discussed in this article, and here for the plant profiles.
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.
