Energy Transfer, SK Gas ink long-term Lake Charles LNG supply deal
U.S. firm Energy Transfer will supply LNG to South Korean firm SK Gas from its Lake Charles LNG export facility under an 18-year deal.
On 3 May, the U.S. firm said it executed a long-term sale and purchase agreement (SPA) with SK Gas Trading for the supply of 0.4 million tonnes per annum (MTPA) of LNG.
Under the SPA, Energy Transfer LNG will supply LNG to SK Gas on a free-on-board (FOB) basis. The purchase price is indexed to the Henry Hub benchmark plus a fixed liquefaction charge.
The deal is for a term of 18 years, with the first deliveries in 2026.
The SPA will be fully effective upon the satisfaction of the conditions precedent. This specifically includes Energy Transfer LNG taking final investment decision (FID).
“We are excited to announce SK Gas as our first Korean offtake customer,” said Tom Mason, president of Energy Transfer LNG. “We are also pleased with the level of interest in our Lake Charles LNG export project from international customers who need LNG supply and from domestic natural gas producers who will benefit from expanding U.S. exports of natural gas. These factors increase our confidence for taking FID by the end of this year.”
Energy Transfer pens LNG SPA with Gunvor
On 2 May, the company also announced that Gunvor Singapore has entered into a Lake Charles LNG SPA.
Therefore, Energy Transfer LNG will supply 2 MTPA of LNG to Gunvor on a FOB basis. This SPA is for a term of 20 years, with first deliveries to also start in 2026.
These are Energy Transfer’s fourth and fifth SPAs signed recently, which bring the total amount of LNG contracted from its Lake Charles LNG export facility to 5.1 MTPA.
“Gunvor is a well-known participant in the LNG industry, and we are excited to have them as a customer,” said Mason. “Gunvor’s commitment to Lake Charles further evidences the progress we are making towards taking FID by year-end.”
Energy Transfer is one of the largest midstream energy companies in North America. Its Lake Charles LNG export facility will take place at the existing brownfield regasification facility. It will use four existing LNG storage tanks, two deepwater berths, and other LNG infrastructure. Lake Charles LNG will also benefit from its direct connection to Energy Transfer’s existing Trunkline pipeline system.