Royal Dutch Shell plc said Monday, March 30, 2020 that it was backing out of the Lake Charles liquefied natural gas (LNG) export project under development in Calcasieu Parish, LA, due to deteriorating market conditions, leaving Energy Transfer LP (ET) to move ahead on its own.
ET said it remains committed to the project and will take over as the lead project developer. The company wasted no time in saying that it plans to evaluate alternatives, including the possibility of bringing other equity partners on board or reducing the size of the facility from three trains to two, which would cut capacity from 16.45 million metric tons/year (mmty) to 11 mmty.
“We continue to believe that Lake Charles is the most competitive and credible LNG project on the Gulf Coast,” said ET’s Tom Mason, president of LNG. “Having the ability to capitalize on our existing regasification infrastructure at Lake Charles provides a cost advantage over other proposed LNG projects on the Gulf Coast.” He also noted that the facility would benefit from access to ET’s nationwide pipeline system.