Shell Exits Lake Charles LNG Project, Energy Transfer takes over

Shell Exits Lake Charles LNG Project, Energy Transfer takes over

Energy Transfer LP (NYSE: ET) announced today that it will take over development of the Lake Charles LNG export project following Shell’s announcement that it has decided not to proceed with an equity investment in the project. Shell advised Energy Transfer that its decision was made in light of current market conditions.

Energy Transfer will take over the role of lead project developer and will continue the development of the project. In this regard, Energy Transfer will evaluate various alternatives to advance the project, including the possibility of bringing in one or more equity partners and reducing the size of the project from three trains (16.45 mtpa of LNG capacity) to two trains (11.0 mtpa).

“We continue to believe that Lake Charles is the most competitive and credible LNG project on the Gulf Coast,” said Tom Mason, Executive Vice President and President – LNG. “Having the ability to capitalize on our existing regasification infrastructure at Lake Charles provides a cost advantage over other proposed LNG projects on the Gulf Coast. The Lake Charles project also benefits from its unparalleled connectivity to Energy Transfer’s existing nationwide interstate and intrastate pipeline system that provides direct access to multiple natural gas basins in the U.S.”

Energy Transfer and Shell signed a Project Framework Agreement in March 2019, under which the two companies agreed to share the cost of developing the project. Since that time the two companies have jointly undertaken the engineering, procurement and construction (EPC) bidding process. Shell has committed to support Energy Transfer with this process through the receipt of commercial EPC bids in the second quarter of 2020. Additionally, Shell will continue to support Energy Transfer during a transition period to facilitate Energy Transfer’s plans to continue the development of the project.

“We remain in discussions with several significant LNG buyers from Europe and Asia regarding LNG offtake arrangements as well as, in some cases, a potential equity investment in the project,” said Mason. “In light of the advanced state of the development of the project, we remain focused on pursuing this project on a disciplined, cost efficient basis and, ultimately, the decision to make a final investment decision will be dependent on market conditions and capital expenditure considerations.”

Energy Transfer Logo

Source / More information : Energy Transfer

Oil and Gas News Straight from the Source

Please email us your industry related news for publication [email protected]
Follow us: @OilAndGasPress on Twitter | OilAndGasPress on Facebook

#FOLLOW US ON INSTAGRAM