In light of Shell’s decision, Energy Transfer will take over the role of lead project developer and will continue the development of the project. In this regard, Energy Transfer claims that it will look at various alternatives to advance the project, including the possibility of bringing in one or more equity partners and reducing the size of the project from three trains (16.45 million tpy of LNG capacity) to two trains (11.0 million tpy).
Tom Mason, Executive Vice President and President – LNG, said: “We continue to believe that Lake Charles is the most competitive and credible LNG project on the Gulf Coast.
“Having the ability to capitalise on our existing regasification infrastructure at Lake Charles provides a cost advantage over other proposed LNG projects on the Gulf Coast. The Lake Charles project also benefits from its unparalleled connectivity to Energy Transfer’s existing nationwide interstate and intrastate pipeline system that provides direct access to multiple natural gas basins in the US.”
According to the statement, Energy Transfer and Shell signed a project framework agreement in March last year, under which both parties agreed to share the cost of developing the project. Since then, the two companies have jointly undertaken the engineering, procurement and construction (EPC) bidding process. Shell has committed to support Energy Transfer with this process through the receipt of commercial EPC bids in 2Q20. In addition to this, Shell will also continue to support Energy Transfer during a transition period to facilitate Energy Transfer’s plans to continue the development of the project.
Mason added: “We remain in discussions with several significant LNG buyers from Europe and Asia regarding LNG offtake arrangements as well as, in some cases, a potential equity investment in the project.
“In light of the advanced state of the development of the project, we remain focused on pursuing this project on a disciplined, cost-efficient basis and, ultimately, the decision to make a final investment decision will be dependent on market conditions and capital expenditure considerations.”
Read the article online at: https://www.lngindustry.com/liquid-natural-gas/31032020/energy-transfer-discusses-shell-exit-from-lake-charles-lng-project/