PROPOSED PROJECT

Energy Transfer LP and Shell US LNG, LLC have 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 investment decision. In December 2019, the parties issued a comprehensive commercial tender package to engineering, procurement and construction (EPC) contractors to submit final commercial bids.

The PFA defines the commercial terms by which the two companies will work to progress an LNG export facility on the U.S. Gulf Coast. Shell will act as the Project Lead prior to the companies reaching a Final Investment Decision (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 two companies will determine the timing of the FID as the project develops based on the outcome of the EPC bidding process, an ongoing assessment of market conditions and overall project competitiveness.

The project brings together two leading entities – Shell as a worldwide leader in gas and LNG, and Energy Transfer as one of the largest pipeline operators in the U.S. – to develop what is expected to be a promising future investment option to monetize abundant, low-cost U.S. gas for export to global customers.

The Lake Charles project is a 50/50 venture between Energy Transfer and Shell. The project, if sanctioned, 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 jobs during construction and 200 full-time positions when fully operational.

FOOTPRINT EXPANSION

This permit-ready project will add 240 acres to Lake Charles LNG’s overall footprint which will allow for the development of a liquefaction and export facility. It is the only brownfield project among those in the pre-FID process.

The ability to recapitalize existing assets provides a cost advantage over other proposed LNG projects on the Gulf Coast, with ready access to U.S. gas supply through existing connections to Henry Hub, and connectivity to Energy Transfer’s vast network of natural gas pipelines.

Permit Ready Project

The Federal Energy Regulatory Commission (FERC) granted its approval in 2015, with authorization from the U.S. Department of Energy to export up to 2.33 billion cubic feet per day of natural gas (or 16.45 million metric tons of LNG per annum). It is one of the few proposed LNG export projects along the Gulf Coast that is fully permitted.

Economic Benefit for Louisiana

Construction is expected to bring about thousands of jobs and related economic activity to benefit the region. If built, the proposed project is estimated to create up to 5,000 local jobs during construction and 200 full-time positions when fully operational.

Environmentally Sensitive

The technology proposed for the project is designed to make it one of the most efficient and cleanest operating LNG facilities in the United States with air emissions expected to be well below both U.S. and Louisiana state limits. By using existing infrastructure, including Energy Transfer's vast pipeline network, the new project will further mitigate environmental impacts from new construction.