New player coming aboard America’s LNG export project in Louisiana ahead of FID

MidOcean Energy, a liquefied natural gas (LNG) player formed and managed by the U.S.-headquartered investment company EIG Global Energy Partners (EIG), is expanding its LNG footprint by setting the wheels in motion to get its hands on a stake in an LNG export project on Louisiana’s Gulf Coast, United States.

Energy Transfer’s subsidiary, Energy Transfer LNG Export, has entered into a heads of agreement (HOA) with MidOcean for its Lake Charles LNG import and regasification terminal, run by the former’s subsidiary Lake Charles Exports (LCE). This provides a non-binding framework of the major terms for the joint development of the LNG project, which is expected to be converted into an LNG export terminal, subject to a final investment decision (FID).

Under the terms of the HOA, MidOcean would commit to covering 30% of the construction costs for the development of the Lake Charles LNG export facility and be entitled to receive 30% of the LNG production, or approximately 5 million tons per annum. The deal also states that the EIG-managed LNG player will have the option to arrange for gas supply of its share of LNG production and commit to long-term gas transportation using Energy Transfer’s pipelines.

Tom Mason, President of Energy Transfer LNG, commented: “We are pleased to have MidOcean partner with us on our Lake Charles LNG project and we believe its participation will provide a significant catalyst towards reaching positive FID. MidOcean’s management team brings a wealth of LNG experience to the project. In addition, Energy Transfer and EIG already have an established relationship that will only be strengthened through this transaction.”

The duo’s obligations will be subject to both parties’ determination to make a positive final investment decision as well as the satisfaction of other conditions precedent. If Energy Transfer LNG decides to develop the project, the LNG export facility would be constructed on the existing brownfield regasification facility site and would capitalize on four existing LNG storage tanks, two deepwater berths, and other LNG infrastructure.

In addition, Lake Charles LNG is expected to benefit from its direct connection to Energy Transfer’s existing Trunkline pipeline system, which provides connections to multiple intrastate and interstate pipelines that allow access to multiple natural gas-producing basins, including the Haynesville, Permian, and Marcellus Shale.

De la Rey Venter, CEO of MidOcean, highlighted: “This agreement has the potential to transform MidOcean’s portfolio, providing a material volume of advantaged Atlantic Basin supply. This complements our current assets, which are all located in the Asia-Pacific Basin. Geographical diversity is a key enabler for value delivery from an LNG portfolio.

“MidOcean considers Lake Charles LNG to be one of the most advantaged US LNG projects under development. We look forward to a deep and fruitful multi-decade partnership with Energy Transfer.”

Technip Energies and KBR got an engineering, procurement, manufacturing, and construction (EPFC) contract a few months ago to repurpose the Lake Charles LNG project into an export terminal with a capacity of 16.45 million tons per annum (mtpa), which requires the delivery of three liquefaction trains and modifications to existing storage and dock facilities.

In December 2024, Chevron inked a sale and purchase agreement (SPA) with Energy Transfer for LNG offtake on a free-on-board (FOB) basis for 20 years.