Shell NA LNG LLC (Shell) and Energy Transfer LNG Export, LLC (Energy Transfer) have signed a 20-year LNG Sale and Purchase Agreement (SPA) for the offtake of 2.1 million tonnes per annum (MTPA) of LNG from the Lake Charles LNG project.
The SPA will become fully effective upon the satisfaction of the conditions precedent, including Energy Transfer taking a final investment decision (FID).
“We believe that Lake Charles is the most competitive LNG project on the Gulf Cost,” said Tom Mason, President of Energy Transfer LNG. “And we are particularly pleased that one of the most prominent LNG industry participants has selected Lake Charles LNG as a supplier. We have had a long-standing relationship with Shell and its predecessor BG Group, as a customer of our regasification facility at Lake Charles. It is great to have Shell re-engaged in the project as a LNG offtake customer. This SPA demonstrates their belief in the project and their commitment to continuing to deliver much-needed supplies of natural gas to markets around the world.”
The LNG export facility will be constructed on the existing brownfield regasification facility site and will capitalise on four existing LNG storage tanks, two deep water berths and other LNG infrastructure. The project, if sanctioned through an affirmative FID, will have a liquefaction capacity of 16.45 million tonnes per annum.
Steve Hill, Executive Vice President Energy Marketing Shell stated “LNG is a flexible energy source, connecting demand and supply centres globally and delivering reliable energy to millions of people. We are very happy to be working once again with Energy Transfer and adding Lake Charles volumes to our global LNG supply portfolio. This agreement enables us to further meet the increasing demand for LNG and positions Shell as a leading buyer of LNG from the US – which in 2021 became the world’s biggest LNG supplier.” LNG is the fastest growing gas supply source and has an important role in ensuring energy security and, as a lower emission energy source when compared to alternatives, in progressing the energy transition.
