Energy Transfer signs SPA with China Gas
Published by Abi Larkin,
Editorial Assistant
LNG Industry,
Energy Transfer LP and China Gas Holdings Limited (China Gas) have announced that China Gas Hongda Energy Trading Co., Ltd, a subsidiary of China Gas has entered into an LNG Sales and Purchase Agreement (SPA) with Energy Transport LNG Export, LLC (Energy Transport LNG), a subsidiary of Dallas-based Energy Transfer LP, related to its Lake Charles LNG project.
Under the SPA, Energy Transfer LNG will supply 0.7 million tpy of LNG to China Gas on a FOB basis. The purchase price is indexed to the Henry Hub benchmark plus a fixed liquefaction charge. The SPA is for a term of 25 years, and first deliveries are expected to commence as early as 2026. The SPAs will become fully effective upon the satisfaction of the conditions precedent, including Energy Transfer LNG taking Final Investment Decision (FID).
“This LNG SPA signed with Energy Transfer LNG, which is the first long-term contract of China Gas, strengthens our existing portfolio for the import of LNG, and will further enable China Gas to reliably and securely meet our natural gas customers’ needs. It is also an important step along the path to realising China’s carbon peaking and carbon neutrality goals,” said Yalong Qi, General Manager of China Gas Hongda Energy Trading Co., Ltd.
“China Gas is a premier natural gas distribution company in China, and we are pleased to enter into this 25-year LNG offtake agreement with them,” said Tom Mason, President of Energy Transfer LNG. “This SPA brings our total amount of LNG contracted from our Lake Charles LNG export facility to nearly 6.0 million tpy and is an important step towards our goal of reaching FID later this year.”
Energy Transfer’s Lake Charles LNG export facility will be constructed on the existing brownfield regasification facility and will capitalise on four existing LNG storage tanks, two deep water berths, and other LNG infrastructure. Lake Charles LNG has received all federal, state, and local permits necessary for the construction for the project, including authorisations from the Federal Energy Regulatory Commission, as well as export authorisations from the Department of Energy. Lake Charles LNG will also benefit from its direct connection to Energy Transfer’s existing Trunkline pipeline system that in turn provides connections to multiple intrastate and interstate pipelines. These pipelines allow access to multiple natural gas producing basins, including the Haynesville, the Permian, and the Marcellus Shale.
Read the article online at: https://www.lngindustry.com/liquid-natural-gas/06062022/energy-transfer-signs-spa-with-china-gas/
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