Last week, U.S. developers pushed ahead big projects with Energy Transfer announcing a new deal for Lake Charles LNG and NextDecade moving forward on Rio Grande Train 4.
At the same time, U.S. LNG feedgas demand rose across the board with several terminals operating above full utilization and commissioning activity with Plaquemines LNG reaching new highs (see chart below).
In a new development, Energy Transfer signed a Heads Of Agreement (HOA) with MidOcean Energy for a 30% stake in its Lake Charles LNG project. MidOcean Energy would assume 30% of the project costs and receive 30% of the terminal’s 16.5 MMtpa capacity. The deal is subject to a positive Final Investment Decision (FID) on the project, but that is closer for Energy Transfer because the project is now reported to be commercially sold out.
Some of Lake Charles's sales are non-binding and would need to be turned into binding agreements. Energy Transfer said in February it would be renegotiating older offtake agreements to account for rising construction costs. The project is still waiting for its non-FTA export license from the DOE because it was denied a license extension in 2023. Earlier this month, the DOE officially rescinded the Biden-era policy that imposed restrictions on extending deadlines for LNG export projects. With the policy reversal, the DOE has returned to its pre-2023 procedures and deadline extensions are set to be considered on a “case by case basis.”
Meanwhile, NextDecade is moving forward with its project and has converted its non-binding agreements with TotalEnergies and Saudi Aramco to binding Sales Purchase Agreements (SPAs) for Rio Grande Train 4. Saudi Aramco will purchase 1.2 MMtpa from Train 4 and TotalEnergies 1.5 MMtpa. Both deals are binding, 20-year SPAs. Train 4 now has 4.6 MMtpa of binding offtake agreements, which NextDecade has said is enough to move forward.
Earlier this month, Stonepeak announced it will acquire a 40% interest in the Louisiana LNG project from Woodside Energy for $5.7 billion. Australian gas and LNG producer, Woodside, purchased the bankrupt Tellurian last year and renamed the proposed Driftwood LNG to The Louisiana LNG plant. The deal will help ease the path to FID for the project. Woodside will still need to make additional equity deals or sell offtake capacity before moving forward.
For more information on LNG projects, check out the LNG Voyager Weekly Report.
