Energy Transfer, a midstream energy company, has signed three non-binding agreements for the offtake of 3.6 million tonnes per annum of liquefied natural gas (LNG) from its Lake Charles LNG project in Louisiana.

The first agreement involves a Japanese consortium committing to purchasing 1.6 million tonnes per annum of LNG for a 20-year term.

The second agreement entails Chesapeake Energy Marketing supplying Lake Charles LNG with natural gas volumes to produce one million tonnes per annum of LNG over a 15-year period.

After the liquefaction process, Gunvor Singapore will purchase the LNG from Chesapeake at a price indexed to the Japan Korea Marker for a 15-year period.

The third agreement is with a US-based customer and involves a tolling arrangement for one million tonnes per annum over a 15-year term.

Tom Mason, President of Lake Charles LNG, emphasized the importance of these agreements for the project's successful development and ongoing work with one of their engineering, procurement, and construction (EPC) contractors.

It is important to note that these agreements are still subject to negotiation and execution of definitive agreements.

The Lake Charles LNG project will convert Energy Transfer's existing Lake Charles LNG import and regasification terminal into an LNG export facility, providing cost advantages compared to other proposed LNG projects along the Gulf Coast.

The project is fully permitted for three liquefaction trains, each with a capacity of 5.5 million tonnes per annum, utilizing existing infrastructure. It is expected to create approximately 5,000 jobs during construction and 200 full-time positions when fully operational.

Louisiana ranks third in natural gas production and proven reserves among all US states, with the state shipping 52% of the nation's liquefied natural gas exports in 2021, according to the US Energy Information Administration (EIA).

With steady growth in LNG exports since 2016, when the first liquefaction unit at Sabine Pass in Louisiana commenced operations, the US became the world's largest LNG exporter in the first half of 2022, averaging nearly 11.2 billion cubic feet per day in LNG exports, as reported by the International Energy Agency (IEA).

The signing of these offtake agreements for the Lake Charles LNG project contributes to the continued growth and prominence of LNG exports from the US.