U.S. pipeline operator Energy Transfer said on Thursday its unit has entered a 20-year LNG sale and purchase agreement with oil and gas major Chevron.
Under the agreement, the unit, Energy Transfer LNG, will supply 2.0 million tonnes per annum (mtpa) of LNG to Chevron from the Lake Charles project in Louisiana.
Energy Transfer has been trying to develop the project since 2015 but has not signed enough customers to move ahead with the proposed 16.5 mtpa facility.
"We believe that Lake Charles is the most compelling LNG project on the Gulf Coast and we continue to make significant progress towards full commercialization of this project." Tom Mason, president of Energy Transfer LNG, said.
The project benefits from its direct link to Energy Transfer's Trunkline pipeline, allowing access to multiple basins, including the Haynesville, the Permian and the Marcellus Shale, the company said.
The LNG will be supplied on a free-on-board (FOB) basis and the purchase price will include a fixed liquefaction charge and a gas supply component indexed to the Henry Hub benchmark.
(Reuters - Reporting by Pooja Menon in Bengaluru; Editing by Vijay Kishore)