China's ENN agrees to buy 2.7 mil mt/year LNG from Energy Transfer

Energy Transfer's proposed Lake Charles LNG export terminal in Louisiana will supply 2.7 million mt/year of volumes to China's ENN and affiliates under two long-term agreements disclosed March 29.

The 20-year sale and purchase agreements are the first firm offtake deals announced for the US facility.

Energy Transfer, which lost Shell as a joint venture partner in 2020, has proceeded with the development of Lake Charles LNG. Energy Transfer may reduce the size of the project to two trains with 11 million mt/year of LNG capacity, from three trains with 16.45 million mt/year of capacity, the company said in a US regulatory filing in February.

Energy Transfer is expected to supply 1.8 million mt/year of LNG to ENN Natural Gas and 900,000 mt/year of LNG to ENN Energy, on an FOB basis, under the two commercial agreements. The purchase price will be indexed to the US Henry Hub, plus a fixed liquefaction charge, Energy Transfer said in a statement. Financial terms were not disclosed.

First deliveries are expected as early as 2026, subject to conditions, including Energy Transfer reaching a positive final investment decision on Lake Charles LNG.

During a Feb. 16 investor call, an Energy Transfer executive said the company hoped to be able to soon announce some agreements that were "close to getting signed."

The executive cited a general interest among Chinese customers in securing more LNG on a fixed-price basis for use as a power plant and home heating fuel amid persistently high spot prices in end-user markets. Cheniere, Venture Global LNG and NextDecade have also announced offtake deals with Chinese customers over the last year.