Chevron Boosts LNG Commitment from Energy Transfer's Lake Charles Facility to 3M Tonnes/Annum

Chevron Corporation (NYSE:CVX) is one of the undervalued S&P 500 stocks to buy according to hedge funds. On June 25, Energy Transfer (NYSE:ET) announced that its subsidiary, Energy Transfer LNG Export, has signed an incremental 20-year Sale and Purchase Agreement/SPA with Chevron USA Inc. (a subsidiary of Chevron Corporation) for an additional 1.0 million tonnes per annum/mtpa of liquefied natural gas/LNG from its proposed Lake Charles LNG export facility.

The new agreement increases Chevron’s total contracted volume from Energy Transfer LNG to 3.0 mtpa, which builds upon an initial 2.0 mtpa agreement signed in December 2024. Under the terms of both SPAs, the LNG will be supplied to Chevron on a free-on-board basis. The purchase price will comprise a fixed liquefaction charge and a gas supply component indexed to the Henry Hub benchmark.

Energy Transfer LNG’s obligations under the SPA are contingent upon the company making a positive final investment decision for the Lake Charles facility. The latest SPA with Chevron helps Energy Transfer in securing long-term LNG commitments for the Lake Charles LNG project. Other recent agreements include a Heads of Agreement with MidOcean Energy for ~5.0 mtpa and an SPA with Kyushu Electric Power Company for 1.0 mtpa.

Chevron Corporation (NYSE:CVX) engages in integrated energy and chemicals operations in the US and internationally. Energy Transfer (NYSE:ET) provides energy-related services in the US.

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Disclosure: None. This article is originally published at Insider Monkey.