According to a statement released by Kyushu Electric on Thursday, the company had decided to enter into a sales and purchase agreement with Energy Transfer LNG Export.
Under the deal, the unit of Energy Transfer will supply the utility with up to one million tonnes of LNG per year over a 20-year period.
Kyushu Electric said this SPA is its first long-term LNG purchase contract from the US, which it believes will further diversify its supply sources and contribute to stable procurement.
Additionally, the delivery terms of this contract are FOB (free on board), with no destination restrictions.
Kyushu Electric said this will enable the utility to procure LNG flexibly in response to fluctuations in electricity supply and demand, such as by adjusting the timing of receipt or selling LNG supplies to other companies when demand is low.
More than 10.4 mtpa
Energy Transfer’s management recently revealed that the company has signed three new supply deals for its planned Lake Charles LNG export facility in Louisiana as the company works to take a final investment decision by the end of this year.
“In April, Lake Charles LNG signed a binding SPA with a Japanese utility company for up to one mtpa,” Energy Transfer’s co-CEO, Tom Long, said during Energy Transfer’s earnings call.
He stated that the agreement was subject to approval by the board of this company, which was expected to be received by the end of May.
Energy Transfer’s co-CEO, Marshal McCrea, said that, with these contracts, “we now pass 10.4 million tons.”
“We’re targeting about 15 million tons,” he said.
Moreover, the company is looking for other partners, “where at the end of the day, we won about 75 percent to 80 percent equity and/or infrastructure partners still have that box to check.”
“We are finalizing our EPC cost over these next couple of months,” McCrea said.
In September last year, Energy Transfer executed an EPC agreement with a joint venture of France’s Technip Energies and US-based KBR.
Extension
Energy Transfer recently secured an extension of time from the US FERC to complete and place into service its Lake Charles LNG export facility.
Lake Charles LNG and Trunkline requested a three-year extension of time until December 31, 2031, in order to reach a final investment decision.
Energy Transfer’s Lake Charles LNG project seeks to convert its existing regasification terminal to an LNG export facility.
It has a proposed liquefaction capacity of 16.45 mtpa and includes three trains, and modifications to the Trunkline gas pipeline.
Lake Charles LNG and MidOcean Energy, the LNG unit of US-based energy investor EIG, also recently signed a heads of agreement, which provides a non-binding framework for the joint development of the LNG project.
Pursuant to the HoA, MidOcean would commit to fund 30 percent of the construction cost and be entitled to 30 percent of the LNG production.
