Chevron expands LNG supply deal with Energy Transfer’s Lake Charles project

Energy Transfer announced its subsidiary, Energy Transfer LNG, has signed an incremental Sale and Purchase Agreement (SPA) with Chevron U.S.A. Inc. for additional LNG supply from its Lake Charles LNG export facility. (Image: Energy Transfer)

Energy Transfer LNG Export, a subsidiary of Energy Transfer LP, has signed a second long-term sale and purchase agreement (SPA) with Chevron U.S.A. Inc. for liquefied natural gas (LNG) supply from the planned Lake Charles LNG export facility in Louisiana. The 20-year deal covers 1 million tonnes per annum (mtpa) of LNG, bringing Chevron’s total offtake commitment from the project to 3 mtpa.

The latest agreement mirrors the structure of the initial SPA signed in December 2024, with volumes to be delivered on a free-on-board (FOB) basis. Pricing will include a fixed liquefaction fee plus a gas supply cost indexed to the Henry Hub benchmark.

Chevron’s expanded commitment is contingent on Energy Transfer making a positive final investment decision (FID) on the Lake Charles LNG project and satisfying other customary conditions.

“This agreement marks a significant milestone in our growing partnership with Chevron and underscores the increasing global demand for reliable, long-term LNG supply,” said Tom Mason, president of Energy Transfer LNG. “With Energy Transfer’s strategic infrastructure and connectivity to key production basins, Lake Charles LNG is poised to be a premier export facility, providing long-term value to our partners and the industry.”

Freeman Shaheen, president of Chevron Global Gas, said the expanded agreement strengthens Chevron’s global LNG portfolio. “With a diverse, reliable, and flexible supply network, we’re committed to delivering affordable, reliable, and ever-cleaner energy to meet global demand and the evolving needs of our customers,” he said.

Momentum builds for Lake Charles LNG

The agreement with Chevron is the latest in a series of commercial milestones for Energy Transfer as it advances the Lake Charles LNG development. Earlier this year, the company signed a Heads of Agreement (HOA) with MidOcean Energy for up to 5 mtpa and a separate SPA with Kyushu Electric Power Co. for 1 mtpa.

Lake Charles LNG is designed as a brownfield redevelopment of an existing import terminal on the U.S. Gulf Coast. The project would make use of existing infrastructure, including four LNG storage tanks, two deepwater berths and other marine and cryogenic systems. The site is directly connected to Energy Transfer’s Trunkline Gas Pipeline, providing access to multiple U.S. natural gas supply basins, including the Haynesville, Permian and Marcellus shales.

Energy Transfer has yet to announce a final investment decision on the project. However, the growing roster of long-term offtake agreements suggests momentum is building toward commercialization.

Chevron’s additional commitment comes amid continued strong demand for long-term LNG contracts, as buyers seek to secure supply amid global energy volatility and shifting energy transition goals. The move supports Chevron’s broader strategy to grow its global LNG business and expand its presence in the U.S. LNG export sector.

Energy Transfer’s Lake Charles project adds to the growing number of Gulf Coast export terminals either under construction or in development, as the U.S. solidifies its role as a leading global LNG supplier. With its existing midstream footprint spanning more than 130,000 miles of pipeline across 44 states, Energy Transfer is positioning the Lake Charles LNG facility as a strategic extension of its integrated asset base.

In addition to Lake Charles LNG, Energy Transfer LP holds substantial interests in midstream, oil, NGL and refined products infrastructure across North America. The company also owns significant equity positions in Sunoco LP and USA Compression Partners.