Offtake Agreement Supports FID for New LNG Facility in Texas

There's enough commitment from offtake agreements to move ahead with a final investment decision on a new liquefied natural gas (LNG) export terminal in Texas, a developer said Thursday.

Texas LNG wants to build an export facility for LNG at the Port of Brownsville. If completed as expected, it would be able to handle about 4 million tons of LNG exports annually, or about 195 billion cubic feet (Bcf).

Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Production Project and Plant databases can click here to read the related project reports and click here for a plant profile.

On Thursday, the company said it executed a heads of agreement (HOA) deal with a "highly experienced, investment-grade, global LNG player" for long-term supplies from Brownsville.

"With this announcement, Texas LNG has now secured customer offtake commitments in a volume sufficient for achieving final investment decision," the company said. "The new agreement adds to existing agreements with EQT Corporation (NYSE:EQT) (Pittsburgh, Pennsylvania), Gunvor Group (Geneva, Switzerland) and Macquarie Group Limited (Sydney, New South Wales)."

Texas LNG is planning to build its facility on a 625-acre site situated close to access points for gas flows from the Permian and Eagle Ford shale basins. Of those, the Permian is the most prolific gas producer, averaging around 25 Bcf/d.

LNG is something of a "bridge fuel" for the energy transition, as it is less polluting than coal. Methane emissions are a nagging concern for critics of the industry, however, who note that natural gas is still a polluting fossil fuel.

Texas LNG said it would be able to alleviate at least some of those environmental concerns by using electric motors powered by renewable energy to drive operations at Brownsville.

"The facility's emission levels are expected to be less than half of the typical U.S. LNG export project and the gold standard of green LNG design," the company said.

The Brownsville facility is already sanctioned by the U.S. Federal Energy Regulatory Commission. No timeline on construction was available.

Tropical Storm Francine curtailed flows into LNG terminals this week. The Cameron LNG facility in Louisiana suffered the most, with feed-gas volumes down by more than half since Monday.

LNG facilities are federally mandated to handle sustained winds of 150 miles per hour, less than the winds from Francine when it made landfall in Louisiana as a Category 2 hurricane late Wednesday.

Meanwhile, a bloated market means LNG is not as profitable as in past years. Prices are off more than 25% from levels seen during the first half of 2023, dropping by $4 billion to reach $13.2 billion over the first six months of this year.

Contact us?for more information.

If you want more news,?click here.