US Energy Transfer Signs 18-Year Long-Term Supply Contract with SK Gas

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Amid the recovery of U.S. liquefied natural gas (LNG) exports following Russia's invasion of Ukraine, SK Gas Trading and U.S. LNG transportation company Energy Transfer (ET) have signed a long-term supply contract.

According to Bloomberg and other sources on the 2nd (local time), Energy Transfer announced that it will supply 400,000 tons of LNG annually for 18 years to SK Gas Trading, a subsidiary of SK Gas. The first supply is expected to begin as early as 2026 and will take place at the Lake Charles export facility in Louisiana, Energy Transfer explained. Tom Mason, President of Energy Transfer, said, "We are very pleased to announce SK Gas as our first customer in Korea," adding, "We look forward to long-term cooperation with SK Gas as the LNG business grows domestically and internationally."

This announcement came just one day after Energy Transfer disclosed a 20-year contract to supply 2 million tons to a French power company. Recently, within the past four weeks, Energy Transfer has announced four long-term supply agreements (SPAs), including the one with SK Gas.

The background to the U.S. LNG companies announcing these contracts lies in the Ukraine war. Europe, which depended on Russia for about 40% of its natural gas imports, has turned to U.S. LNG companies to reduce this dependence. Although U.S. companies faced difficulties such as contract delays and funding shortages despite government approvals, the situation reversed after the Ukraine war. European imports of U.S. LNG, which were around 22 billion cubic meters last year, increased to 4.4 billion cubic meters in January alone this year. U.S. President Joe Biden has pledged to send an additional 15 billion cubic meters of natural gas to Europe by the end of this year.

Bloomberg reported, "To avoid bidding wars with Europe over U.S. LNG volumes and to secure stable supplies, Asian customers such as China are emerging as the largest long-term buyers of U.S. LNG."

This content was produced with the assistance of AI translation services.