Dallas & Houston, March 26 - Neftegaz.RU. Energy Transfer and Shell signed a Project Framework Agreement (PFA) that provides the framework to further develop a large-scale LNG export facility in Lake Charles, Louisiana toward a potential final investment decision (FID).
Energy Transfer reported this on March 25, 2019.
In addition, the parties have started actively engaging with LNG Engineering, Procurement and Contracting (EPC) companies with a plan to issue an Invitation to Tender (ITT) in the weeks ahead.
The PFA defines the commercial terms by which companies will work toward delivering an LNG export facility on the U.S. Gulf Coast.
Shell will act as the Project Lead prior to the companies reaching an FID, and if sanctioned, as construction manager and operator of the facility.
Energy Transfer will act as Site Manager and Project Coordinator prior to FID.
The decision to make an affirmative FID to proceed with construction of the project will be subject to both companies’ assessment of the outcome of the EPC bidding process, overall project competitiveness and global LNG market conditions at the time of such decision.
The Lake Charles project is a 50/50 venture between Energy Transfer and Shell.
The project, if sanctioned through an affirmative FID, 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 million tonnes per annum to export U.S. natural gas to global customers.
The project is fully permitted, uses existing infrastructure and benefits from abundant natural gas supply and proximity to major pipeline infrastructure, including Energy Transfer’s vast pipeline network.
If built, the project is estimated to create up to 5,000 local jobs during construction and 200 full-time positions when fully operational.
“Lake Charles presents a material, competitive liquefaction project with the potential to provide Shell with an operated LNG export position on the U.S. Gulf Coast by the time global supply is expected to tighten in the mid-2020’s,” said Frederic Phipps, Shell’s Vice President, Lake Charles LNG.
“Our partnership with Energy Transfer plays to our respective strengths. Together, we are expertly positioned to advance a project that could provide customers in Asia, Europe and the Americas with cleaner, reliable energy for decades to come.”
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