Energy Transfer reports solid fourth-quarter results and progress on Lake Charles project

Thursday, 20 February 2020
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Energy Transfer, the US pipeline owner and shareholder with Royal Dutch Shell in the Lake Charles liquefied natural gas export project, reported solid fourth-quarter results as the LNG venture makes more progress.

The Dallas, Texas-based company said fourth-quarter net income attributable to partners amounted to $1.01 billion, primarily due to higher operating income.

It reported adjusted gross earnings of $2.81 billion, up 5 percent from the fourth quarter of 2018.

Energy Transfer said that among the quarterly highlights was the announcement in December 2019 with Shell US LNG of a comprehensive commercial tender package for engineering, procurement and construction contractors to submit final commercial bids.

“The proposed Lake Charles LNG liquefaction project being jointly developed by Energy Transfer and Shell on a 50-50 basis would modify Energy Transfer’s existing LNG import facility in Lake Charles, Louisiana to add LNG liquefaction capacity of 16.45 million tonnes per annum for export to global markets,” the company explained.

Energy Transfer also noted that in October 2019 that the Permian Express pipeline expansion went into full service.

The Lake Charles facility was the longest-serving US import terminal before the shale-gas boom and previously imported cargoes from Trinidad and Equatorial Guinea.

Under the transformation, Lake Charles will become an export facility and the successful EPC bidder is expected to be chosen after the second quarter of 2020.

The commercial tender focused on the technical scope of the project, specifically verifications of the engineering and design of the liquefaction facility.

Energy Transfer sees the Lake Charles project would capitalizes on “repurposing” the existing brownfield regas assets to achieve cost savings in the construction of the liquefaction facility.

It added that the project would also benefit from the unique strength of Energy Transfer as a leading natural gas pipeline operator with extensive connectivity to the Lake Charles facility.

Energy Transfer and Shell have signed a framework agreement designating Shell as the project leader and as construction manager and operator of Lake Charles LNG.

The Federal Energy Regulatory Commission has authorized a deadline for the Lake Charles plant to be completed by mid-December 2025.

Shell gained its stake in the Lake Charles facility from its takeover in 2015 of BG Group of the UK.

Energy Transfer began in 1995 as a small intra-state natural gas pipeline operator and is now one of the largest energy infrastructure firms in the US.

Lake Charles would be Shell's largest liquefaction foothold in North America, rivalling its LNG Canada joint venture in the province of British Columbia.

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