Texas LNG Brownsville LLC, a leading liquefied natural gas (LNG) export project on the Gulf Coast, has reached significant milestones by selling over half its capacity and signing an additional agreement with EQT Corporation, the largest U.S. natural gas producer.
Texas LNG Sells Majority of Export Capacity
In a major step forward, Texas LNG has announced that it has sold more than 50% of the LNG export capacity from its planned Brownsville terminal. The 4 million metric tons per annum (MTPA) facility is expected to commence operations in 2026.
Securing long-term offtake agreements is crucial for LNG projects to obtain financing and reach a final investment decision (FID).
Selling over half our capacity represents a significant vote of confidence from LNG buyers and moves Texas LNG closer to FID, said Texas LNG CEO Vivek Chandra.
EQT Signs Tolling Agreement for 1.5 MTPA
Texas LNG also revealed that it has entered into a heads of agreement (HOA) with EQT Corporation for 1.5 MTPA of natural gas liquefaction services.
Under the 20-year tolling agreement, EQT will be able to liquefy its natural gas at the Texas LNG facility and export the LNG to global markets.
We are excited to partner with EQT, a low-cost natural gas leader, to connect abundant U.S. gas supply with the world’s growing LNG demand,
stated Langtry Meyer, Texas LNG co-founder and COO. “This agreement is another major commercial milestone for Texas LNG.“
For EQT, the deal provides a long-term outlet for its natural gas production at a time when U.S. gas prices remain low due to oversupply.
EQT recently cut its 2024 sales volume forecast and extended output curbs through May in response to the challenging market conditions.
Advancing U.S. LNG Exports Amid Challenges
The progress at Texas LNG comes as the U.S. continues to establish itself as a top LNG exporter, while also facing some headwinds.
Environmental justice advocates have criticized the industry’s impacts on Gulf Coast communities, while some Asian LNG buyers are feeling the pinch of rising spot prices.
Additionally, the European Union is moving closer to potentially banning Russian LNG imports, which could further shake up the global gas market. Sweden has called for such a ban ahead of an upcoming EU meeting.
Despite these challenges, the long-term outlook for U.S. LNG remains robust as the world seeks to displace coal and reduce emissions.
Projects like Texas LNG are striving to boost American energy exports while mitigating local impacts.
As Texas LNG advances, we remain committed to responsible development, job creation, and environmental stewardship, added CEO Chandra. We will continue working closely with all stakeholders to deliver a world-class LNG facility.
With its latest commercial successes, Texas LNG is well-positioned to progress through the development process and begin delivering LNG to customers worldwide by the mid-2020s.
The EQT tolling agreement and over 50% capacity sold mark major steps towards making the project a reality.
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