Energy Transfer LP (ET) and EIG’s MidOcean Energy have entered into a heads of agreement (HOA) that provides a non-binding framework for a potential joint development of the Lake Charles LNG project, the companies said April 9.
Under the non-binding HOA with ET subsidiary Energy Transfer LNG Export, MidOcean would commit to fund 30% of Lake Charles LNG’s construction costs. In exchange, MidOcean would be entitled to receive 30% of the LNG production—approximately 5 million tonnes per annum (mtpa). Lake Charles LNG is permitted for a capacity of 16.45 mpta.
The framework for the HOA is subject to both Energy Transfer and MidOcean taking a final investment decision (FID) as well as the satisfaction of other conditions.
The HOA also provides that MidOcean Energy will have the option to arrange for gas supply for its share of LNG production and that MidOcean will commit to long-term gas transportation on Energy Transfer pipelines. Lake Charles LNG would have direct connections to Energy Transfer’s existing Trunkline pipeline system that connects to multiple intrastate and interstate pipelines.
Those pipelines allow access to natural gas plays in the Haynesville and Marcellus shales and the Permian Basin.
If Energy Transfer LNG reaches a positive FID, the LNG export facility would be constructed on an existing brownfield regasification facility site and would capitalize on four existing LNG storage tanks, two deep water berths and other LNG infrastructure.
“We are pleased to have MidOcean partner with us on our Lake Charles LNG project and we believe its participation will provide a significant catalyst towards reaching positive FID,” said Tom Mason, president of Energy Transfer LNG. “MidOcean’s management team brings a wealth of LNG experience to the project. In addition, Energy Transfer and EIG already have an established relationship that will only be strengthened through this transaction.”
De la Rey Venter, CEO of MidOcean, said the agreement has the potential to transform MidOcean’s portfolio, providing a material volume of advantaged Atlantic Basin supply.
“This complements our current assets, which are all located in the Asia-Pacific Basin. Geographical diversity is a key enabler for value delivery from an LNG portfolio,” Venter said. “MidOcean considers Lake Charles LNG to be one of the most advantaged US LNG projects under development. We look forward to a deep and fruitful multi-decade partnership with Energy Transfer.”
In December 2024, Energy Transfer entered a 20-year LNG sale and purchase agreement with Chevron U.S.A. Inc. to supply 2 mtpa at the Lake Charles LNG facility, which brings the facility closer to an FID.
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