Chevron inks 20-year LNG supply deal with Energy Transfer

U.S. energy giant Chevron has signed a sale and purchase agreement (SPA) with Energy Transfer LNG, a subsidiary of compatriot firm Energy Transfer, for the delivery of volumes from a liquefied natural gas (LNG) export project the latter is developing on Louisiana’s Gulf Coast.

Chevron is slated to get 2 million tonnes per annum (mtpa) of LNG from Energy Transfer’s proposed Lake Charles LNG export facility on a free-on-board (FOB) basis for 20 years. The agreement is subject to the latter taking a final investment decision (FID) on the project and the satisfaction of other conditions precedent.

“Chevron believes LNG plays an important role in meeting the world’s need for energy while helping advance lower carbon ambitions. This new long-term agreement demonstrates our focus on increasing access to affordable, reliable, ever-cleaner energy supplies to meet growing global demand,” noted Freeman Shaheen, President of Chevron Global Gas.

Energy Transfer is developing a large-scale LNG export facility in Lake Charles, Louisiana located on the Calcasieu ship channel. The project entails converting the existing LNG import and regasification terminal, encompassing four storage tanks, two deep water berths, and other LNG infrastructure, to an export facility.

“We are pleased that one of the most prominent LNG industry participants has selected Lake Charles LNG as a supplier,” said Tom Mason, President of Energy Transfer LNG. “We believe that Lake Charles is the most compelling LNG project on the Gulf Coast and we continue to make significant progress towards full commercialization of this project.”

According to the developer, the future plant will benefit from a direct connection to its existing trunkline pipeline system that leads to intrastate and interstate pipelines. These pipelines are said to provide access to multiple natural gas-producing basins, including the Haynesville, the Permian, and the Marcellus Shale. 

KTJV, a joint venture between France’s Technip Energies and U.S. KBR recently won the assignment to repurpose the import and regasification terminal into an LNG export terminal. The new LNG export facility is expected to have a 16.45-mtpa capacity.

The future terminal is one of the facilities affected by the Biden administration’s temporary freeze on pending permits for exports of LNG to non-free trade agreement (non-FTA) countries, which a U.S. judge ruled to be “likely arbitrary, capricious, or otherwise unlawful” in June.

Based on the ruling, Energy Transfer LNG urged the U.S. Department of Energy (DOE) to take immediate action and allow it to export LNG from Lake Charles LNG to non-FTA countries in July. This was opposed by a U.S. non-profit called the Center for Biological Diversity, calling the application “flawed.”