Energy Transfer announced on June 25 that it had expanded its offtake agreement with Chevron for the planned Lake Charles LNG project in Louisiana.

Under an incremental sale and purchase agreement (SPA), Chevron now stands to receive an additional 1mn tonnes per year (tpy) from Lake Charles LNG over a 20-year period. This adds to an initial offtake agreement for 2mn tpy, signed in December 2024, bringing Chevron’s total contracted volumes from Lake Charles to 3mn tpy.

Energy Transfer said that as with the first SPA, the LNG delivered under the latest agreement would be supplied on a free-on-board (FOB) basis, with the purchase price consisting of a fixed liquefaction charge and a gas supply component indexed to the Henry Hub benchmark. Also in line with the first SPA, the latest deal is contingent on Energy Transfer taking a final investment decision (FID) on the Lake Charles project.

Indeed, an FID looks increasingly closer as Energy Transfer continues to sign new offtake agreements. The company noted in its announcement that other recent agreements also included a heads of agreement (HoA) with MidOcean Energy for around 5mn tpy and an SPA with Kyushu Electric Power for 1mn tpy. MidOcean, which is managed by EIG Global Energy Partners, is also set to commit to funding 30% of the construction costs of Lake Charles LNG, receiving 30% of the LNG production or 5mn tpy in return, if a binding agreement follows the HoA.

The Lake Charles facility would have a total liquefaction capacity of 16.5mn tpy. Energy Transfer said during its last earnings call in May that it was targeting an FID by the end of this year. The latest agreement with Chevron takes the company one step closer to this goal.

“This agreement marks a significant milestone in our growing partnership with Chevron and underscores the increasing global demand for reliable, long-term LNG supply,” stated Energy Transfer LNG’s president, Tom Mason. “With Energy Transfer’s strategic infrastructure and connectivity to key production basins, Lake Charles LNG is poised to be a premier export facility, providing long-term value to our partners and the industry."

Energy Transfer noted that Lake Charles is expected to benefit from its direct connection to the company's existing trunkline pipeline system, which in turn would connect it to multiple intrastate and interstate pipelines. These pipelines allow access to multiple gas-producing regions, including the Haynesville, the Permian Basin and the Marcellus shale, the company said.