Chevron staying ahead of LNG game with another 20-year US offtake deal

U.S.-headquartered energy giant Chevron has taken steps to secure additional liquefied natural gas (LNG) by inking one more sale and purchase agreement (SPA) with Energy Transfer LNG, a subsidiary of Energy Transfer, for the delivery of supplies from an LNG export project being developed on Louisiana’s Gulf Coast.

Thanks to this 20-year LNG supply agreement, Chevron has increased its total commitment by 1 million tonnes per annum  (mtpa) from the Lake Charles LNG export facility, enabling its total contracted volume with Energy Transfer LNG to reach 3 mtpa, following the initial 2 mtpa agreement signed in December 2024.

In line with the first SPA, LNG will be supplied to Chevron on a free-on-board (FOB) basis, with the purchase price consisting of a fixed liquefaction charge and a gas supply component indexed to the Henry Hub benchmark.

Tom Mason, President of Energy Transfer LNG, commented: “This agreement marks a significant milestone in our growing partnership with Chevron and underscores the increasing global demand for reliable, long-term LNG supply.

“With Energy Transfer’s strategic infrastructure and connectivity to key production basins, Lake Charles LNG is poised to be a premier export facility, providing long-term value to our partners and the industry.”

The project developer explains that its obligations under the SPA remain subject to a positive final investment decision (FID) for the large-scale LNG export facility in Louisiana, as well as the satisfaction of other conditions precedent.

Freeman Shaheen, President of Chevron Global Gas, remarked: “This expanded LNG agreement reflects the growing strength of Chevron’s global gas business. With a diverse, reliable, and flexible supply network, we’re committed to delivering affordable, reliable, and ever-cleaner energy to meet global demand and the evolving needs of our customers.”

According to Energy Transfer, the latest SPA with Chevron builds on the firm’s momentum in securing long-term LNG commitments for Lake Charles LNG, with recent agreements covering a heads of agreement (HOA) with MidOcean Energy for approximately 5 mtpa and an SPA with Kyushu Electric Power Company for 1 mtpa.

The Lake Charles LNG export project will be constructed on the existing brownfield regasification facility site to capitalize on four existing LNG storage tanks, two deepwater berths, and other LNG infrastructure.

This terminal is expected to benefit from its direct connection to Energy Transfer’s existing Trunkline pipeline system, which provides connections to multiple intrastate and interstate pipelines that allow access to multiple natural gas producing basins, including the Haynesville, Permian, and Marcellus Shale.

Technip Energies and KBR are tasked with the engineering, procurement, manufacturing, and construction (EPFC) segment of the export terminal, which will have a capacity of 16.45 mtpa.