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Energy Transfer Equity, L.P.
ETE and Energy Transfer Partners, L.P.
ETP (collectively, “Energy Transfer”) and BG Group
announced today that they have entered into a project development agreement
(PDA) to jointly develop the liquefied natural gas (LNG) export project at the
existing Trunkline LNG import terminal in Lake Charles, Louisiana.
The announcement follows the Department of Energy conditionally granting
authorization to Energy Transfer and BG Group to export from the existing
Trunkline LNG import terminal up to 15 million metric tonnes per annum (mtpa)
of LNG to non-free trade agreement nations.
The proposed project will include the construction of three liquefaction
trains and will use the existing LNG storage and marine berthing facilities
owned by Trunkline LNG Company, LLC (a wholly-owned subsidiary of Energy
Transfer). Energy Transfer has secured all property rights required for the
site of the liquefaction facility.
The project is being developed to liquefy domestic supplies of natural gas for
export to meet growing global demand for LNG. Exporting LNG to world markets
is expected to provide economic and employment related benefits for the U.S.,
including approximately 250 operational positions and several thousand jobs
during the project's construction phase.
The PDA sets forth the commercial arrangements between the parties and a final
investment decision to proceed with the project is expected to be made in
2015.
Energy Transfer will own and finance the proposed new liquefaction facility,
and BG Group will have a long-term tolling agreement with Energy Transfer for
the offtake, although BG Group may choose to assign some of its capacity or
offtake to third parties. Trunkline Gas Company, LLC (a wholly-owned
subsidiary of Energy Transfer), will provide pipeline transportation services
to supply natural gas to the project.
BG Group views Lake Charles as an attractive, low cost LNG supply option and
is one of the most advanced LNG development projects in its portfolio. BG
Group will oversee the engineering and design and will manage construction of
the facility, as well as operate the combined facility. The project's front
end engineering and design (FEED) study being done by Technip is well
advanced. The project is in the Federal Energy Regulatory Commission's (FERC)
“pre-filing” environmental review process, with the parties currently
expecting to file a formal application with the FERC by the end of the first
quarter of 2014.
Pending final investment decisions from both Energy Transfer and BG Group,
construction is expected to start in 2015, with first LNG exports anticipated
in 2019.
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