Page 8 - NorthAmOil Week 23 2022

NorthAmOil PROJECTS & COMPANIES NorthAmOil

Energy Transfer finalises

another offtake agreement

US-CHINA US-BASED Energy Transfer has signed an LNG president, Tom Mason.
sales and purchase agreement (SPA) with China The latest announcement comes amid rising
Gas Hongda Energy Trading, a subsidiary of demand for LNG and increased global com-
China Gas Holdings. petition for supplies in the wake of the war in
The deal is the fifth to be signed by Energy Ukraine, which has led to European countries
Transfer since March for supply of LNG from its seeking out alternatives to Russian gas. Against
proposed Lake Charles LNG terminal in Louisi- this backdrop, Asian buyers – who were likely
ana. It brings a final investment decision (FID) already in negotiations when the war broke out
The Lake Charles LNG on the terminal a step closer. – have wasted no time in signing new long-term
export facility will Under the newly announced deal, China offtake agreements.
involve the conversion Gas will buy 700,000 tonnes per year (tpy) of Indeed, with the exception of commod-
of an existing import LNG from Energy Transfer subsidiary Energy ity trader Gunvor, all of the buyers Energy
terminal. Transfer LNG Export on a free-on-board (FOB) Transfer has lined up so far have been Asian
basis for a period of 25 years. The purchase price companies.
will be indexed to the US’ Henry Hub bench- Lake Charles LNG is a brownfield project
mark plus a fixed liquefaction fee. Deliveries are that involves conversion of an existing import
expected to begin in 2026. facility to exports. The export plant would have
“This SPA brings our total amount of LNG a liquefaction capacity of 16.5mn tpy, so there is
contracted from our Lake Charles LNG export still some way to go in terms of signing up offtak-
facility to nearly 6.0mn tpy and is an impor- ers. Nonetheless, the past few months come as a
tant step towards our goal of reaching FID later major boost for the project, which was previously
this year,” commented Energy Transfer LNG’s seen as less likely to reach FID anytime soon.™

Chesapeake seeks adviser

to help expand into LNG

US SHALE gas producer Chesapeake Energy is Last month, in the company’s earnings call,
seeking to expand into the LNG market and is Dell’Osso also revealed that Chesapeake would
planning to hire an LNG adviser to help advance seek to capitalise on its increased Haynesville
this expansion. shale position near the US Gulf Coast by sign-
According to a LinkedIn job posting, the firm ing more deals for LNG exports priced at global
is looking to hire someone to “lead new business indexes.
opportunities for Chesapeake” in LNG and pro- Additionally, he indicated in the call that the
Chesapeake has vide executives with “guidance on LNG market- company could move to acquire a stake in an
expanded its operations ing activities”. LNG terminal in the future, with Chesapeake
in the Haynesville In March, Chesapeake’s CEO, Nick Dell’Osso, already looking for direct contracts with overseas
shale. confirmed at a conference that the firm was aim- consumers in an effort to secure higher prices.
ing to take on a greater role in the LNG market. “If the deal is linked to Henry Hub [in the
Chesapeake also recently took part in a gath- US], that is not as attractive to us,” Chesapeake’s
ering organised by trade groups the American executive vice president and chief financial
Exploration and Production Council (AXPC) officer, Mohit Singh, told S&P Global last month.
and LNG Allies with European countries seek- “What we are trying to diversify into is some sort
ing to reduce their reliance on Russian gas fol- of LNG index deal”, for example at the Dutch
lowing Moscow’s invasion of Ukraine. Title Transfer Facility (TTF).
US shale gas producers including Chesapeake Chesapeake expects high demand for its gas
have been vocal about the need for pipeline production from the Haynesville play since it is
improvements and new LNG export capacity to certified as having lower emissions, potentially
ship gas to Europe in order for EU countries to making it more attractive to buyers looking for
wean themselves off Russian gas. cleaner natural gas.™

P8 www. NEWSBASE .com Week 23 09•June•2022