Page 9 - GLNG Week 18 2022

GLNG AMERICAS GLNG

Gunvor secures long-term deal

with Energy Transfer for US LNG

SUPPLY SWISS-BASED commodity trader Gunvor is as a customer,” said Tom Mason, president of
to buy 2mn tonnes per year (tpy) of LNG from Energy Transfer LNG. “Gunvor’s commitment
Energy Transfer’s proposed Lake Charles LNG to Lake Charles further evidences the progress
export terminal. we are making towards taking FID by year end.”
Gunvor agreed to a 20-year FOB deal as Euro- Energy Transfer’s Lake Charles LNG export
pean buyers look to tie in long-term supply deals facility will be constructed on the existing
for US LNG supplies at below the current high brownfield regasification facility and will cap-
spot prices. italise on four existing LNG storage tanks, two
Energy Transfer also said on May 3 that it had deepwater berths and other LNG infrastruc-
signed a 400,000 tpy Sale and Purchase Agree- ture. Lake Charles LNG will also benefit from its
ment (SPA) with South Korea’s SK Gas Trading direct connection to Energy Transfer’s existing
for gas from Lake Charles. Trunkline pipeline system that in turn provides
The purchase price is indexed to the Henry connections to multiple intrastate and interstate
Hub benchmark plus a fixed liquefaction charge. pipelines. These pipelines allow access to mul-
The SPA is for a term of 18 years, and first deliv- tiple natural gas producing basins, including
eries are expected to commence as early as 2026. the Haynesville, the Permian and the Marcellus
This is Energy Transfer’s fourth SPA Shale.
announced in the last four weeks, bringing the There has been a rush of long-term US
total amount of LNG contracted from its Lake LNG export deals lately with European buyers.
Charles LNG export facility to 5.1mm tpy. France’s Engie agreed to import up to 1.75mn tpy
Europe is trying to reduce its exposure to of LNG from NextDecade’s terminal in Texas.
Russian pipeline gas as the war in Ukraine causes However, one worry for US LNG developers
price volatility and sanctions on Russian gas. is they face rising prices across the world, as US
Gunvor is to pay prices indexed to the US exporters are charging more because of soaring
Henry Hub benchmark plus a fixed liquefaction costs.
charge. First deliveries are anticipated as early as LNG project developers will need to pass on
2026. costs to the buyer satisfy lenders and unlock pro-
The deal will become fully effective upon ject finance to reach FID.
the satisfaction of certain conditions, including This risk is that while buyers need to pay high
Energy Transfer taking a final investment deci- prices now, markets could change in 10 years,
sion (FID) on the Lake Charles project, the com- while Europe’s commitment to reach net zero
panies said in a joint statement. by 2050 will reduce demand for US LNG in the
“Gunvor is a well-known participant in the long run.™
LNG industry, and we are excited to have them

Week 18 06•May•2022 www. NEWSBASE .com P9