SCT&E LNG Inc. has lined up natural gas supply for its proposed liquefied natural gas (LNG) terminal in Louisiana. The 20-year, fixed-price deal is a first of its kind among U.S. LNG export projects, the company said.
A nonbinding agreement was struck in May 2015, and subsequent negotiations have now led to a binding agreement, the company said Tuesday. CEO Greg Michaels said the deal creates a long-term hedge on natural gas for customers that sign up to take LNG from the terminal.
The terminal is proposed to be constructed on Monkey Island in Cameron Parish, LA. SCT&E LNG said in February that it had struck a 1 million tonne per annum (mtpa) offtake agreement with an Asian power utility (see Daily GPI, Feb. 22).
The project is scheduled to produce 12 mtpa of LNG with shipments starting in 2022. It would liquefy about 1.6 Bcf/d of natural gas. Exports would be under take-or-pay tolling agreements. To date, SCT&E LNG has signed four offtake memoranda of understanding for a total of 4.7 mtpa of LNG, more than one-third of total proposed total capacity.
"Together with our upstream supplier, we have essentially created a 25-year hedge on natural gas for our customers, and the LNG offtake community is responding positively," Michaels said.
Originally established by Southern California Telephone Co., SCT&E LNG Inc. is a Nevada corporation, headquartered in Houston.