NorthAmOil: Shell, Energy Transfer sign Lake Charles LNG offtake agreement

Shell and Energy Transfer have signed a 20-year sales and purchase agreement (SPA) for 2.1mn tonnes per year (tpy) of LNG produced at the planned Lake Charles LNG project in Louisiana.
The move represents the latest in a series of binding offtake agreements signed by Energy Transfer over the past few months. The Lake Charles LNG project, which involves conversion of an existing import facility to exports, had not been viewed as a development that was likely to move forward soon until recently, when rising LNG demand revived its fortunes. As a result, Energy Transfer has now signed six offtake deals covering nearly 8mn tpy of output from the facility, or almost half of the project’s planned capacity of 16.45mn tpy.
The latest SPA is also notable because Shell was previously a partner in Lake Charles LNG but pulled out around two years ago, when the LNG market had taken a knock owing to the coronavirus (COVID-19) pandemic.
Energy Transfer anticipates reaching a final investment decision (FID) on Lake Charles by the end of this year. The company also notes on its website that Lake Charles LNG is the only brownfield project among the proposed US LNG terminals at the pre-FID stage, which it believes gives the development a cost advantage.