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Energy Transfer LP announced 3.6mil mt/year LNG term contracts from Lake Charles LNG

Energy Transfer LP has announced that it has entered into three non-binding Heads of Agreement (HOAs) related to long-term LNG offtake from its Lake Charles LNG project for an aggregate of 3.6 mil mt/year.

One of the HOAs specifies that a Japanese consortium would purchase 1.6 mil mt/year for a 20-year term, subject to an option to convert the offtake arrangement to an equity participation providing for the same volume of LNG.

Under one of the HOAs, Chesapeake Energy Marketing LLC would supply to Lake Charles LNG volumes of natural gas sufficient to produce 1.0 mil mt/year of LNG for a period of 15 years and, post liquefaction, Gunvor Singapore Pte Ltd would purchase LNG from Chesapeake at a price indexed to the Japan Korea Marker (JKM) for a period of 15 years.   

The other HOA is with a U.S. customer and relates to a tolling arrangement for 1.0 mil mt/year for a 15-year term. The HOAs are subject to the negotiation and execution of definitive agreements.

 “We are pleased with the continued confidence of our customers in the Lake Charles LNG project,” said Tom Mason, President of Lake Charles LNG. “These HOAs are important for the successful development of the project, along with the continuation of certain pre-FID work with one of our EPC contractors.”