Agreement advances planned Louisiana LNG plant

An agreement announced this week moves another proposed Gulf Coast LNG export project closer to reality.

Energy Transfer Equity LP and Energy Transfer Partners LP have signed a project development agreement with BG Group jointly to develop the LNG export plant proposed at the existing Trunkline LNG import terminal in Lake Charles, La.

The announcement follows the US Department of Energy’s conditional granting of authorization to Energy Transfer and BG to export from the import terminal up to 15 million tonnes/year (tpy) to non-free trade agreement nations (OGJ Online, Aug. 26, 2013).

The proposed plant will include three 5-million-tpy liquefaction trains and use the existing LNG storage and marine berthing owned by Trunkline LNG Co. LLC, a wholly owned unit of Energy Transfer. The announcement said Energy Transfer had secured all property rights required for the site.

The agreement sets out commercial arrangements between the companies; a final investment decision is expected in 2015, the company said.

Energy Transfer will own and finance the proposed liquefaction plant, and BG will have a long-term tolling agreement with Energy Transfer for the offtake, although BG may choose to assign some of its capacity or offtake to third parties. Trunkline Gas, a unit of Energy Transfer, will provide pipeline transportation to supply gas to the plant.

BG will oversee engineering and design and manage construction, as well as operate the combined plant and terminal. The project’s frontend engineering and design study being done by Technip, the company said, “is well advanced.”

The project is in the US Federal Energy Regulatory Commission’s “pre-filing" environmental review process, it also said, with the parties currently expecting formally to apply with FERC by end of first-quarter 2014.

Pending FID from both Energy Transfer and BG, construction will start in 2015, with first LNG exports in 2019.

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