LNG

US midstream company Energy Transfer is targeting financial close on its 16.5 mtpa Lake Charles LNG project in 2026, having secured sufficient offtake commitments to underpin project finance.

Saudi Aramco has signed 17 preliminary agreements, valued more than $30 billion, during the US-Saudi Investment Forum in Washington. Projects include a potential investment in Lake Charles LNG, along with several equity and offtake agreements with US LNG developers as Aramco wants to secure an additional 20 mtpa in supply.

Energy Transfer has delayed its final investment decision (FID) on the $10.9 billion Lake Charles LNG export project to the first quarter of 2026, instead of year-end 2025 as intended earlier. This hold-up follows lengthy development stages, uncommitted volumes and rising concern over LNG oversupply risk.

Chevron has agreed to offtake an additional 1 mtpa from Energy Transfer's Lake Charles LNG export terminal. The 20-year agreement increases Chevron’s contracted volumes to 3 mtpa, as the US oil major seeks to expand its global gas business.

April 12 (LNGJ) - The UK LNG import terminal at the Isle of Grain on the Medway River in Kent is scheduled to receive a US LNG delivery later on April 12 on board the “BW Pavilion Aranda” with capacity of 173,400 cubic metres. The cargo was lifted on March 30 from the Cameron plant in Louisiana.

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. 

June 16 (LNGJ) – LNG cargoes from Qatar and the US are headed for the UK and Italy. The 260,900 cubic metres capacity Q-Flex carrier “Aamira” was scheduled to deliver a shipment on June 24 to the UK South Hook terminal at Milford Haven from the Ras Laffan plant in Qatar, according to shipping data.

   The 173,600 cubic metres capacity carrier “Stena Clear Sky” was due to deliver a shipment on June 17 to the floating Italian terminal, the “FSRU Toscana”, deployed offshore Livorno. Data showed that the cargo was lifted from Lake Charles on the US Gulf Coast.

The US Department of Energy (DoE) has issued two long-term orders authorizing additional liquefied natural gas exports from two projects of the US Gulf Coast, the QatarEnergy-backed Golden Pass LNG plant in Texas and the Magnolia LNG venture in Louisiana owned by the Glenfarne Group.

Golden Pass, an existing import terminal currently being transformed into an export facility, is a joint venture between QatarEnergy and ExxonMobil Corp. and the first liquefaction Train is scheduled to come on stream by 2024.

The Federal Energy Regulatory Commission formally approved the transformation of Golden Pass, located on the Sabine-Neches Waterway in Texas, back in December 2016.

However, the Qatar-ExxonMobil project has advanced at a slow pace because of doubts several years ago over market demand issues that have now been resolved and work has gathered pace to construct three liquefaction Trains with around 16 million tonnes per annum of output.

US regulators had previously approved construction of the Magnolia LNG plant proposed for a 115-acre site near the Calcasieu Ship Channel with 8.8 MTPA of output from four Trains.

Investment buyer

The Magnolia development had previously been owned by an Australian-listed company LNG Ltd that ceased trading amid financial difficulties.

Glenfarne, a New York-based fund specialising in energy infrastructure investment, then took over the project.

The DoE orders have authorized additional 0.5 billion cubic feet per day (Bcf/d) of natural gas flows to the plants. “The orders allow Golden Pass LNG to export the equivalent of an additional 0.35 Bcf/d and Magnolia LNG to export an additional 0.15 Bcf/d of natural gas as LNG to any country not prohibited by US law or policy,” said the statement.

The DoE had previously issued long-term non-free trade agreement export orders for the majority of the projects’ capacities, with Magnolia LNG’s authorization for 1.08 billion cubic feet per day in 2016 and an authorization for 2.21 billion cubic feet per day issued to Golden Pass LNG in 2017.

The statement explained that the two orders align the respective export authorizations to additional capacity that the FERC had approved for the projects based on optimized project designs.

“The United States is the largest global producer of oil and natural gas and a net exporter of energy. US fuel supplies, including LNG, continue to play a key role in global energy security, particularly due to Putin’s invasion of Ukraine,” said the DoE.

It noted that US LNG exports had recently reached new highs of about 12 billion cubic feet per day and are expected to grow to more than 13 Bcf per day by the end of this year as additional export capacity comes online from seven large-scale plants now operating. 

Tellurian Inc., the US developer of the Driftwood LNG export project at Lake Charles in Louisiana, has signed its first landmark LNG supply deal with international commodities company Gunvor to give the joint venture momentum.

Gunvor trades in energy from its main offices in cities such as Geneva in Switzerland, Singapore, the Chinese city of Shanghai and Houston in Texas and its agreement with Tellurian was signed by Gunvor Singapore Pte Ltd.

Tellurian's transaction with Gunvor is a sales and purchase agreement (SPA) for 3 million tonnes per annum of cargoes for a period of 10 years,

“The volumes will be indexed to a combination of two indices, the Japan Korea Marker (JKM) and the Dutch Title Transfer Facility (TTF), netted back for transportation charges,” said Tellurian.

The LNG would be delivered on free-on-board (FOB) basis from the Driftwood facility, the project on the Gulf Coast with proposed total output of 27.6 MTPA.

The Gunvor’s global commodities business already involves almost 18 MTPA of traded LNG cargoes.

“Tellurian intends to market up to 10 MTPA of LNG in our first phase on a JKM, TTF or blended price basis, as our integrated model provides the flexibility to offer this valuable product,” explained Tellurian President and Chief Executive Octávio Simões.

“We welcome Gunvor, the largest independent global trader of LNG volumes, to Driftwood and look forward to providing a cleaner fuel to meet growing global energy needs,” stated Simões.

Tellurian had hinted in its first-quarter earnings report at the start of May 2021 that the improving market favoured the signing soon of supply agreements.

The Houston, Texas-based company said it continued to build its Gulf Coast natural gas business and had concentrated on paying down debt.

The overall project plan for Tellurian now is for the Driftwood liquefaction plant to have first-phase production of 16 MTPA, rising to over 27 MPTA with expansions.

Tellurian produced 3.3 billion cubic feet of natural gas for the quarter in the Haynesville shale basin in north Louisiana.

Tellurian’s upstream assets include 9,704 net acres and interests in 72 producing wells.

The company ended the first quarter with around $58.7M of cash and cash equivalents and generated $8.7M in revenues from natural gas sales.

Tellurian added that it still had a strong balance sheet consisting of around $270.3M in total assets.

Charif Souki, the Executive Chairman of Tellurian, said in a presentation last month that the use of the gas-fired power option was growing in Asia and his company hoped to start finalising commercial agreements based on the current “very strong gas market fundamentals” in Asia and Europe.

The Cheniere Energy-owned Corpus Christi LNG export plant in Texas is the first of the four US Gulf Coast-based facilities to recommence cargo liftings since activities were temporarily halted as Hurricane Laura approached last week, while seven LNG carriers are standing by in the Gulf to load.

The Corpus Christi plant began loading cargoes again just two days after the hurricane made landfall farther north in the Gulf of Mexico near Lake Charles on the Louisiana-Texas border.

The first cargo was loaded on August 30 onto the 177,200 cubic metres capacity “Sohshu Maru”, with another cargo being taken by the 140,645 cubic metres capacity “Golar Arctic” and a third on August 31 by the 155,000 cubic metres capacity “Gaslog Shanghai”, according to shipping data.

Renewed cargo liftings helped to boost Gulf Coast LNG cargo futures to their highest levels in 2020. These are settled derivatives contracts available through to October 2022 and based on the average free-on-board (FOB) cargo prices.

The value of a US GCL cargo for October 2020 rose to $3.600, up from $3.250 per MMBtu on August 31, while November jumped to $4.486 from $4.347 per MMBtu.

The December GCL contract increased to $4.973 per MMBtu from $4.905 per MMBtu on August 31.

Before the Corpus Christi plant began cargo liftings the last cargo loaded in the GoM had been on August 23, the shipping data showed.

There were also seven unladen LNG carriers on September 2 either in a holding pattern offshore or entering the Gulf.

Other plants were also on the way back. Cheniere said that a comprehensive facility and operational assessment of its Sabine Pass plant in Louisiana, the largest facility in the US with 22.5 MTPA of nameplate capacity, had revealed no significant damage as a result of the hurricane.

“Cheniere has started to execute on its plan to restart LNG production at Sabine Pass,” said the company.

Sempra Energy, the owner of the Cameron LNG export plant in Louisiana, said its teams had been able to conduct preliminary visual inspections of the Cameron facility and the site of the proposed Port Arthur LNG project in Texas and of other infrastructure in the region.

“The initial evaluation indicates minimal flooding and no catastrophic wind damage,” said Sempra.

“Thorough inspections are planned pending confirmation of sufficient site safety and security. The team at Cameron LNG is committed to the restoration of full operations as soon as safely practicable,” added the company.

Venture Global, the Virginia-based company developing three liquefaction and export plants in Louisiana, said its Calcasieu Pass facility under construction in Cameron Parish had sustained minimal impacts from the hurricane, which passed directly over the project site.

“A walk-through inspection of most areas of the site following the storm confirmed that the project site’s robust storm protection system, including a perimeter wall and storm water pumping system, performed as designed,” said Venture Global.

“While we are relieved by the minimal impacts to Calcasieu Pass LNG, we are mindful that the surrounding communities of Cameron and Lake Charles have suffered significant damage from this powerful and historic storm,” the company added.