Energy Transfer and Shell have signed a project framework agreement to advance the development of a large-scale export facility in Lake Charles, Louisiana toward a final investment decision (FID).
Lake Charles is a joint venture between Energy Transfer and Shell. If sanctioned, the project would convert Energy Transfer’s existing Lake Charles LNG import and regasification terminal to an LNG export facility with a liquefaction capacity of 16.45 mtpa. Shell will act as the project lead prior to FID and would serve as construction manager and operator of the facility after sanction. Energy Transfer will act as site manager and project coordinator prior to FID.
“We are pleased to be moving forward with Shell in progressing this major LNG export project,” Tom Mason, president of Lake Charles LNG, said in a statement. “We believe the combination of our assets and Shell’s LNG experience will create a platform for exporting natural gas from the Gulf Coast to the global marketplace that is unmatched.”
Shell said in a statement that the decision to sanction will be based on both companies’ assessment of the outcome of the engineering, procurement, and construction (EPC) bidding process, overall project competitiveness, and global LNG market conditions.
“Lake Charles presents a material, competitive liquefaction project with the potential to provide Shell with an operated LNG export position on the Gulf Coast by the time the global supply is expected to tighten in the mid-2020s,” said Frederic Phipps, Shell’s vice president for Lake Charles LNG. “Our partnership with Energy Transfer plays to our respective strengths.”