Energy Transfer will not commit to a final investment decision (FID) on its proposed 16.5mn t/yr (2.2bn ft³/d) Lake Charles LNG export facility in Louisiana until it has sold off 80pc of equity stakes in the project, co-chief executive Mackie McCrea told investors today.
The project currently is fully owned by Energy Transfer, casting doubt on the company's plan to reach FID by the end of the year. Investor MidOcean Energy signed a preliminary agreement in April to fund 30pc of the project's construction costs in exchange for 30pc of offtake, or about 5mn t/yr, but the two sides have yet to finalize the deal.
Nearly all of the project's offtake is contracted, with 11.9mn t/yr set aside to binding agreements. But the "last, big, most important box" is adding equity partners, McCrea said.
McCrea said "we've got our work cut out for us" to sell down equity stakes before needing to reset the terms of its engineering, construction and procurement contract with contractors Technip Energies and KBR.
"Let me make this real clear: We will not proceed with LNG until we have secured 80pc of equity partners similar to ourselves," McCrea said.
The midstream firm has sought for years to convert the existing Lake Charles import facility into an export terminal. Shell signed on with a 50pc stake in 2019 but pulled out the following year as part of cost-cutting measures during the Covid-19 pandemic.
Energy Transfer also has extensive assets in crude oil and NGL infrastructure.
"When you're chasing billions of dollars in projects, several of which we've already announced, we've got to be careful stepping out on something like this," McCrea said. "We're not an LNG company like we compete with. We're a pipeline company that has a regas facility converting part of it to LNG."
Lake Charles LNG, located in southwest Louisiana, is fully permitted by US federal regulators through 2031 after receiving extensions from the US Department of Energy and the Federal Energy Regulatory Commission earlier this year.
