Chevron inks offtake deal for Lake Charles LNG volumes

US energy infrastructure developer Energy Transfer said December 19 its subsidiary, Energy Transfer LNG, had entered into a 20-year LNG sale and purchase agreement with Chevron for up to 2mn tonnes/year of LNG from its proposed Lake Charles LNG facility in Louisiana.

The LNG will be supplied on a free-on-board (FOB) basis and the purchase price will consist of a fixed liquefaction charge and a gas supply component indexed to the Henry Hub benchmark. The deal is subject to Energy Transfer taking a final investment decision on the 16.5mn tonnes/year brownfield project, something that has eluded Energy Transfer since it announced the project in 2015.

“We believe that Lake Charles is the most compelling LNG project on the Gulf Coast and we continue to make significant progress towards full commercialisation of this project,” Energy Transfer LNG President Tom Mason said.

Lake Charles LNG would be developed on the site of an existing regasification facility with four LNG storage tanks, two deep water berths and other LNG infrastructure. The site is also connected to Energy Transfer’s existing Trunkline pipeline system, which provides connections to multiple intrastate and interstate pipelines and multiple natural gas supply basins, including the Haynesville, the Permian and the Marcellus shale basin.