Energy Transfer, MidOcean sign HoA to jointly develop Lake Charles LNG project

Energy Transfer LP subsidiary Energy Transfer LNG Export LLC has entered into a heads of agreement (HoA) with MidOcean to jointly develop the 16.45 million tonnes/year (tpy) Lake Charles LNG export project. 

The HoA provides a non-binding framework of the major terms for the development, the companies said in a release Apr. 9. 

Pursuant to agreement, MidOcean, an LNG company formed and managed by EIG Global Energy Partners, would fund 30% of the construction costs for 30% of the LNG production (about 5.0 million tpy). 

MidOcean also would have the option to arrange for gas supply for its share of LNG production and commit to long-term gas transportation on Energy Transfer pipelines. 

The Lake Charles LNG project, in in Calcasieu Parish, La., would transform Energy Transfer's existing import and regasification terminal into an LNG export plant (OGJ Online, Sept. 20, 2024). The conversion would include delivery of three 5.5-million tpy modular liquefaction trains and would capitalize on four existing LNG storage tanks, two deep water berths, and other LNG infrastructure, the company said.

MidOcean chief executive officer De la Rey Venter said the agreement would provide the company a “material volume of advantaged Atlantic Basin supply,” complimenting its current assets, all located in the Asia-Pacific Basin. 

“Geographical diversity is a key enabler for value delivery from an LNG portfolio. MidOcean considers Lake Charles LNG to be one of the most advantaged US LNG projects under development,” he continued. 

The obligations of Energy Transfer LNG and MidOcean Energy under the HoA will be subject to both parties’ determination to take a positive final investment decision (FID) as well as the satisfaction of other conditions precedent.