Shell, Energy Transfer Advance Lake Charles LNG Project

Anglo-Dutch major Shell, through its Shell US LNG subsidiary, and Energy Transfer Partners, said March 25 they had signed a project framework agreement (PFA) underpinning the continued development of their 16.45mn mt/yr Lake Charles LNG project in southern Louisiana.

The PFA is seen as a critical step towards a final investment decision (FID) and allows Shell and Energy Transfer to actively engage with engineering, procurement and contracting (EPC) companies with a plan to issue an invitation to tender in the coming weeks.

“Lake Charles presents a material, competitive liquefaction project with the potential to provide Shell with an operated LNG export position on the US Gulf Coast by the time global supply is expected to tighten in the mid-2020s,” Frederic Phipps, Shell’s vice resident, Lake Charles LNG, said in a statement. “Our partnership with Energy Transfer plays to our respective strengths. Together, we are expertly positioned to advance a project that could provide customers in Asia, Europe and the Americas with cleaner, reliable energy for decades to come.”

Under the terms of the PFA, Shell will act as project lead prior to a positive FID and as construction manager and operator of the facility, if it is sanctioned. Energy Transfer will act as site manager and project coordinator prior to FID.

If sanctioned by the partners, Lake Charles LNG, a 50/50 joint venture between Shell and Energy Partners, will convert Energy Transfer’s existing import and regasification terminal to an LNG export terminal. The project is fully permitted, uses existing infrastructure and benefits from abundant natural gas supply and proximity to major pipeline infrastructure.

The project, if sanctioned, will create up to 5,000 local jobs during construction and 200 full-time positions when fully operational.