Energy Transfer, Korea's SK Gas sign LNG pact
US midstream company Energy Transfer on May 3 announced the execution of a long-term sale and purchase agreement (SPA) with South Korea’s SK Gas for the supply of 0.4mn metric tons/year of LNG from its Lake Charles LNG export facility in Louisiana.
Under the SPA, Energy Transfer will supply LNG to SK Gas on a free-on-board basis. The purchase price is indexed to the Henry Hub benchmark plus a fixed liquefaction charge. The agreement is for a term of 18 years, and the first deliveries are expected to start as early as 2026.
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The SPA will become fully effective upon the satisfaction of the conditions precedent, including Energy Transfer LNG taking the final investment decision (FID), the company said.
This is Energy Transfer’s fourth SPA announced in the last four weeks, bringing the total amount of LNG contracted from its Lake Charles LNG export facility to 5.1mn mt/yr.
“We are excited to announce SK Gas as our first Korean offtake customer,” said Tom Mason, president of Energy Transfer LNG. “We are also pleased with the level of interest in our Lake Charles LNG export project from international customers who need LNG supply and from domestic natural gas producers who will benefit from expanding US exports of natural gas. These factors increase our confidence for taking FID by the end of this year.”
Lake Charles LNG export facility will be constructed on the existing brownfield regasification facility and will capitalise on four existing LNG storage tanks, two deep water berths and other LNG infrastructure.