Energy Transfer, ENN Sign 20-Year Deal for Lake Charles LNG

DALLAS & LANGFANG, China — Energy Transfer LP, ENN Natural Gas and ENN Energy Holdings Ltd. announced that ENN NG and ENN Energy have entered into two LNG sale and purchase agreements (SPA) with Energy Transfer LNG Export LLC, a subsidiary of Energy Transfer LP, related to its Lake Charles LNG project.

Under the two SPAs, ET LNG is expected to supply 1.8 million tonnes of LNG to ENN NG, and 0.9 million tonnes of LNG to ENN Energy, per annum on a free-on-board (FOB) basis. The purchase price is indexed to the Henry Hub benchmark plus a fixed liquefaction charge. Both SPAs are for a term of 20 years, and first deliveries are expected to commence as early as 2026. The SPAs will become fully effective upon the satisfaction of the conditions precedent by ET LNG, including reaching FID.

Lake Charles LNG will be constructed on the existing brownfield regasification facility and will capitalize on four existing LNG storage tanks, two deep water 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.

ENN NG has an annual LNG distribution capacity of over 10 bcm and runs the first large-scale private LNG terminal in China -- Zhoushan LNG Terminal. Its business layout covers the entire natural gas value chain, including distribution, trading, storage and transportation, and production and engineering.

“The signing of these long-term SPAs will further enrich ENN’s LNG resources, expand resource supply channels, and improve ENN’s natural gas supply capacity to meet the rapidly growing natural gas demand in the domestic market,” said Zheng Hongtao, president of ENN NG and vice chairman of the board of directors of ENN Energy Holdings. “It also provides our customers with better resources and services, ensures natural gas supply nationwide, and contributes to the low-carbon transformation of energy structure.”

Energy Transfer is one of the largest and most diversified midstream energy companies in North America, with a strategic footprint in all the major U.S. production basins. The core operations include complementary natural gas midstream, intrastate and interstate transportation and storage assets; crude oil, natural gas liquids (NGL) and refined product transportation and terminalling assets; and NGL fractionation. The company owns and operates approximately 120,000 miles of pipelines and associated energy infrastructure across 41 states transporting approximately 30% of the United States’ oil and natural gas.

Relying on industry best practices, ENN NG has built an intelligent operation platform for the natural gas industry —, which accelerates the aggregation of demand, resources, reserves, and delivery ecology of the natural gas industry. It also innovates and develops digital intelligence services and promotes the digital intelligence upgrade of the natural gas industry. In 2021, ENN NG’s total natural gas sales volume was 37.2 Bcm, accounting for approximately 10% of China’s total natural gas consumption.

“We are very pleased to have ENN as a customer,” Tom Mason, president of ET LNG, said. “The execution of these two SPAs represents a significant event in moving the Lake Charles LNG project towards FID. We are experiencing strong demand for long-term offtake contracts for Lake Charles LNG and we are optimistic that we will be in a position to take a positive FID by year end. The Lake Charles LNG project is expected to be financed primarily through infrastructure funds and strategic partners, with Lake Charles LNG retaining an equity stake and operatorship of the liquefaction facility.”


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