Energy Transfer signs Lake Charles LNG supply deal with China Gas
U.S. firm Energy Transfer will supply LNG to China Gas from its Lake Charles LNG export facility under a 25-year agreement.
China Gas Hongda Energy Trading, a subsidiary of China Gas, has entered into an LNG sale and purchase agreement with Energy Transfer LNG Export, a subsidiary of Energy Transfer, related to its Lake Charles LNG project.
Under the SPA, Energy Transfer LNG will supply 0.7 million tonnes of LNG per annum to China Gas on a free-on-board (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. The first deliveries are to start as early as 2026.
The SPAs will become fully effective upon the satisfaction of the conditions precedent, including Energy Transfer LNG taking the 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 realizing China’s carbon peaking and carbon neutrality goals,” said Yalong Qi, general manager of China Gas Hongda Energy Trading.
“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 mtpa and is an important step towards our goal of reaching FID later this year.”
Energy Transfer’s Lake Charles LNG export facility’s location will be at the existing brownfield regasification facility; It will use 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 of the project. The project will also benefit from its direct connection to Energy Transfer’s existing Trunkline pipeline system, which provides connections to multiple pipelines.