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Energy Transfer and Shell sign framework agreement for Lake Charles LNG project

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LNG Industry,


Energy Transfer LP has announced that it has signed a project framework agreement (PFA) with Shell US LNG LLC, providing the framework to further develop a large scale LNG export facility in Lake Charles, Louisiana, US, toward a potential final investment decision (FID).

In addition to this, Energy Transfer claims that both parties have started discussions with LNG engineering, procurement and contracting (EPC) companies, with the aim of issuing an invitation to tender (ITT) in the weeks ahead.

Tom Mason, President, Lake Charles LNG, an Energy Transfer subsidiary, said: “We are pleased to be moving forward with Shell in progressing this major LNG export project.

“We believe the combination of our assets and Shell’s LNG experience will create a platform for exporting natural gas from the US Gulf Coast to the global marketplace that is unmatched.”

Frederic Phipps, Shell’s Vice President, Lake Charles LNG, added: “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-2020’s.

“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.”

According to the statement, the PFA defines the commercial terms by which the two companies will work towards delivering an LNG export facility on the US Gulf Coast. Shell will act as the project lead prior to the companies reaching an FID, and, if sanctioned, as construction manager and operator of the facility. Energy Transfer, meanwhile, will act as site manager and project coordinator prior to FID. The decision to make an affirmative FID to proceed with construction of the project will be subject to both companies’ assessment of the outcome of the EPC bidding process, overall project competitiveness and global LNG market conditions at the time of such a decision.

The Lake Charles project is a 50:50 venture between Energy Transfer and Shell. If sanctioned by a positive FID, it would convert Energy Transfer’s existing Lake Charles LNG import and regasification terminal into an LNG export facility with a liquefaction capacity of 16.45 million tpy, exporting US gas to global customers. The project is fully permitted, uses existing infrastructure, and benefits from abundant natural gas supply and proximity to major pipeline infrastructure, including Energy Transfer’s vast pipeline network. If construction goes ahead, it is expected that the project could create up to 5000 local jobs during construction, and 200 full time positions once fully operational.

Read the article online at: https://www.lngindustry.com/liquefaction/26032019/energy-transfer-and-shell-sign-framework-agreement-for-lake-charles-lng-project/

 

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