Energy Transfer LP entered into a 20-year LNG sales and purchase agreement (SPA) with Japan’s Kyushu Electric Power Co. from its Lake Charles LNG project, according to a May 29 press release.
The company’s subsidiary Energy Transfer LNG Export will supply Kyushu up to 1 million tonnes per annum (mtpa) of LNG, with terms in place to take a positive final investment decision (FID) on Lake Charles LNG, the company said.
If a positive FID is reached, the export facility would be constructed on the existing brownfield regasification facility site and will capitalize on Energy Transfer’s four existing LNG storage tanks, two deepwater berths and other LNG infrastructure, the company said.
Under the SPA, the LNG’s purchase price will consist of “a fixed liquefaction charge and a gas supply component indexed to the Henry Hub benchmark,” Energy Transfer said.
Lake Charles LNG is located on the Calcasieu Ship Channel in Cameron Parish, Louisiana. The facility is permitted for a capacity of 16.45 mtpa.
The plant is expected to benefit from its direct connection to Energy Transfer’s Trunkline natural gas pipeline system, which provides connections to multiple intrastate and interstate pipelines.
These pipelines allow access to natural gas producing basins, including the Permian Basin and Haynesville and Marcellus shales.
“We are proud to be selected as an LNG supplier by Kyushu, one of Japan’s leading energy companies,” said Tom Mason, president of Energy Transfer LNG. “Kyushu has been supportive of Lake Charles LNG for a long time and we appreciate their loyalty. We are also pleased that Lake Charles LNG continues to make strong strides toward full commercialization.”
The SPA follows Energy Transfer’s heads of agreement announced in April with MidOcean Energy for approximately 5 mtpa of LNG production from Lake Charles LNG.
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