Energy Transfer LNG Export has signed a 20-year LNG Sale and Purchase Agreement (SPA) with Shell NA LNG.
The LNG will be delivered from the Lake Charles LNG project.
Under the SPA, Energy Transfer LNG will supply Shell with 2.1 mill tonnes of LNG per annum.
The LNG will be supplied on a free-on-board (FOB) basis and the purchase price will be indexed to the Henry Hub benchmark, plus a fixed liquefaction charge.
First deliveries are expected to commence in 2026.
The SPA will only become fully effective upon the satisfaction of certain conditions, including Energy Transfer LNG taking a final investment decision (FID) on the project.
“We believe that Lake Charles is the most competitive LNG project on the Gulf Coast,” said Tom Mason, Energy Transfer LNG President. “And we are particularly pleased that one of the most prominent LNG industry participants has selected Lake Charles LNG as a supplier.”
Energy Transfer LNG has agreed six SPAs in the last five months, bringing the total amount of LNG contracted from its Lake Charles LNG export facility to nearly 8 mill tonnes per annum.
“We have had a long-standing relationship with Shell and its predecessor BG Group, as a customer of our regasification facility at Lake Charles,” Mason added. “It is great to have Shell re-engaged in the project as a LNG offtake customer. This SPA demonstrates their belief in the project and their commitment to continuing to deliver much-needed supplies of natural gas to markets around the world.”
Steve Hill, Shell’s Executive Vice President Energy Marketing, stated: “LNG is a flexible energy source, connecting demand and supply centres globally and delivering reliable energy to millions of people. We are very happy to be working once again with Energy Transfer and adding Lake Charles volumes to our global LNG supply portfolio.
“This agreement will enable us to further meet the increasing demand for LNG and positions Shell as a leading buyer of LNG from the US – which in 2021 became the world’s biggest LNG supplier,” he said.
Energy Transfer’s Lake Charles LNG export facility is a fully permitted project on the US Gulf Coast having received authorisations from the US Federal Energy Regulatory Commission (FERC), as well as export authorisations from the US Department of Energy (DoE).
The project will be constructed on the existing brownfield regasification facility site and will tap into 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 that in turn provides connections to multiple intrastate and interstate pipelines.
These pipelines allow access to multiple natural gas producing basins, including the Haynesville, the Permian and the Marcellus Shale.
