Energy Transfer and MidOcean Energy Sign Strategic Agreement to Jointly Advance Lake Charles LNG Export Project
In a major development in the global liquefied natural gas (LNG) market, Energy Transfer LP and MidOcean Energy announced that they have signed a Heads of Agreement (HOA) outlining a partnership to jointly develop the Lake Charles LNG export facility. The agreement marks a significant step forward for the project, which is located in Louisiana and poised to become one of the United States’ most strategically positioned LNG export terminals.
MidOcean Energy is a global LNG company created and managed by EIG Global Energy Partners (EIG), a leading institutional investor with decades of experience in energy and infrastructure. The HOA, while non-binding at this stage, lays out the core commercial framework under which the two companies will collaborate. It also defines the primary roles and financial commitments expected from each party in the potential joint development of the Lake Charles LNG project.
Key Terms of the Agreement
Under the HOA, MidOcean Energy will commit to funding 30% of the total construction costs of the Lake Charles LNG export facility. In return, MidOcean will be entitled to receive 30% of the facility’s total LNG production capacity, which is expected to be approximately 5.0 million tonnes per annum (mtpa). This strategic offtake arrangement strengthens MidOcean’s portfolio while supporting Energy Transfer’s goal of advancing the project to final investment decision (FID).
The agreement also gives MidOcean Energy the option to arrange for its own gas supply to cover its share of LNG production. Additionally, MidOcean has agreed to enter into long-term natural gas transportation agreements on Energy Transfer’s pipeline infrastructure, reinforcing the integrated nature of the collaboration.
The obligations described in the HOA are contingent on both parties ultimately deciding to move forward with a positive Final Investment Decision (FID). Until then, the agreement serves as a non-binding roadmap to guide continued negotiations and project planning.
Strategic Benefits for Both Companies
This collaboration promises substantial strategic benefits to both parties. Energy Transfer gains a significant financial and operational partner to help bring the Lake Charles LNG project to fruition, while MidOcean diversifies its LNG portfolio with access to Atlantic Basin supply—a crucial development for a company whose existing assets are concentrated in the Asia-Pacific region.
Tom Mason, President of Energy Transfer LNG, expressed enthusiasm about the partnership, stating, “We are pleased to have MidOcean partner with us on our Lake Charles LNG project and we believe its participation will provide a significant catalyst towards reaching positive FID. MidOcean’s management team brings a wealth of LNG experience to the project. In addition, Energy Transfer and EIG already have an established relationship that will only be strengthened through this transaction.”
From MidOcean’s perspective, the Lake Charles partnership represents an opportunity to expand its geographic footprint and reduce portfolio risk through diversification. De la Rey Venter, Chief Executive Officer of MidOcean Energy, highlighted the project’s strategic appeal: “This agreement has the potential to transform MidOcean’s portfolio, providing a material volume of advantaged Atlantic Basin supply. This complements our current assets, which are all located in the Asia-Pacific Basin. Geographical diversity is a key enabler for value delivery from an LNG portfolio. MidOcean considers Lake Charles LNG to be one of the most advantaged US LNG projects under development. We look forward to a deep and fruitful multi-decade partnership with Energy Transfer.”
Lake Charles LNG: A Unique Infrastructure Opportunity
If the Lake Charles LNG project reaches FID, the facility will be developed on an existing brownfield regasification site—a key advantage that significantly reduces construction risk and capital expenditure. This site already features four LNG storage tanks, two deepwater marine berths, and other valuable infrastructure components. These existing assets help accelerate timelines, improve cost efficiency, and reduce the environmental footprint of new development.
The Lake Charles project is uniquely positioned to take advantage of its direct connection to Energy Transfer’s extensive Trunkline pipeline system. This pipeline network connects to numerous other intrastate and interstate gas pipelines, ensuring a robust and reliable natural gas supply from a wide range of prolific basins. These include the Haynesville Shale, the Permian Basin, and the Marcellus Shale—all of which are among the most productive natural gas sources in North America.
The pipeline connectivity also enhances the flexibility and competitiveness of the Lake Charles project in global LNG markets, enabling it to adapt to supply-demand dynamics and deliver gas efficiently to international customers.
The Growing Importance of U.S. LNG Exports
This agreement between Energy Transfer and MidOcean Energy comes at a time when the global LNG market is undergoing significant transformation. Driven by demand from Asia and Europe, as well as the ongoing need for cleaner alternatives to coal and oil, LNG has become an essential bridge fuel in the transition to a lower-carbon global energy system.
The U.S. has rapidly emerged as one of the world’s top LNG exporters, leveraging its abundant shale gas resources, extensive infrastructure, and geopolitical advantages. As European nations seek to reduce their dependence on Russian natural gas and Asian economies continue to grow, demand for U.S. LNG is expected to remain robust well into the next decade.
Projects like Lake Charles LNG are critical to meeting this rising global demand. With the added support of MidOcean Energy, the project stands to become a key part of the U.S. LNG export landscape, potentially supplying natural gas to Europe, Asia, and beyond for decades to come.
EIG and Energy Transfer: A Proven Partnership
The HOA builds upon a longstanding relationship between Energy Transfer and EIG, MidOcean’s parent company. EIG has a strong track record of investing in energy and infrastructure assets around the world, including LNG projects in multiple regions.
By partnering through MidOcean Energy, EIG continues to deepen its involvement in the global LNG value chain, adding strategic depth to its investments while supporting the development of critical infrastructure.
Energy Transfer, meanwhile, benefits from EIG’s industry expertise and financial backing, which enhance the commercial credibility and bankability of the Lake Charles LNG project. Together, these companies bring a blend of operational excellence, financial strength, and global LNG market knowledge to the table.
While the HOA does not yet represent a final commitment, it is a meaningful signal of intent and a key step toward project realization. In the coming months, Energy Transfer and MidOcean Energy are expected to finalize the terms of their partnership, conduct additional feasibility and permitting work, and evaluate market conditions as they move toward a potential FID.
If the project moves forward, construction will likely begin soon after FID, with initial LNG production projected within a few years. Given its advanced state of planning and existing infrastructure, Lake Charles LNG could come online more quickly than many greenfield competitors.
