Energy Transfer Announces Restructuring of Lake Charles LNG Project
March 30 2020 - 10:30AM
Business Wire
Energy Transfer to Take Over as Project
Developer as Shell Exits the Project Due to Current Market
Conditions
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.”
About Lake Charles LNG
Energy Transfer owns the existing regasification facility in
Lake Charles, Louisiana that was originally built in 1982. The
facility includes four LNG storage tanks, two deep water docks in
the Calcasieu Channel and other infrastructure assets.
About Energy Transfer
Energy Transfer LP (NYSE: ET) owns and operates one of the
largest and most diversified portfolios of energy assets in the
United States, with a strategic footprint in all of the major
domestic production basins. ET is a publicly traded limited
partnership with core operations that 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; NGL fractionation; and
various acquisition and marketing assets. ET, through its ownership
of Energy Transfer Operating, L.P., also owns Lake Charles LNG
Company, as well as the general partner interests, the incentive
distribution rights and 28.5 million common units of Sunoco LP
(NYSE: SUN), and the general partner interests and 46.1 million
common units of USA Compression Partners, LP (NYSE: USAC). For more
information, visit the Energy Transfer website at
www.energytransfer.com.
Forward-Looking Statements
This news release may include certain statements concerning
expectations for the future that are forward-looking statements as
defined by federal law. Such forward-looking statements are subject
to a variety of known and unknown risks, uncertainties, and other
factors that are difficult to predict and many of which are beyond
management’s control. An extensive list of factors that can affect
future results are discussed in the Partnerships’ Annual Reports on
Form 10-K and other documents filed from time to time with the
Securities and Exchange Commission. The Partnerships undertake no
obligation to update or revise any forward-looking statement to
reflect new information or events.
The information contained in this press release is available on
our website at energytransfer.com.
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Investor Relations: Bill Baerg Brent Ratliff Lyndsay Hannah
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Media Relations: Vicki Granado Lisa Coleman 214-840-5820
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