Chevron Corporation (NYSE:CVX) has deepened its long-term commitment to U.S. liquefied natural gas (LNG) exports by signing a new 20-year Sale and Purchase Agreement (SPA) with Energy Transfer (NYSE:ET). The agreement, announced on June 25, adds 1.0 million tonnes per annum (mtpa) to Chevron’s offtake from Energy Transfer’s proposed Lake Charles LNG facility, bringing its total contracted volume to 3.0 mtpa. As global LNG demand surges and U.S. Gulf Coast projects prepare for their next phase of growth, this deal underscores Chevron’s strategic focus on energy security, diversification, and competitive LNG sourcing.

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Here’s a summary of the key points from the Chevron–Energy Transfer LNG deal, its implications, and why it matters in the context of the broader LNG and natural gas market:

🔹 Chevron Expands LNG Commitment at Lake Charles

Date Announced: June 25, 2025
Parties Involved:

Chevron USA Inc. (subsidiary of Chevron Corporation, NYSE: CVX)
Energy Transfer LNG Export, LLC (subsidiary of Energy Transfer, NYSE: ET)

Update:

Chevron signed a new 20-year Sale and Purchase Agreement (SPA) for 1.0 million tonnes per annum (mtpa) of LNG.
This increases Chevron’s total commitment to 3.0 mtpa from Energy Transfer’s proposed Lake Charles LNG export facility.

Terms:

Free-on-board (FOB) basis
Pricing: Includes a fixed liquefaction fee + Henry Hub–indexed gas component

🔹 Lake Charles LNG Project – Current Status

Still awaiting a Final Investment Decision (FID) by Energy Transfer
This SPA supports commercial viability and de-risking of the project
Other recent commercial agreements:
- MidOcean Energy: ~5.0 mtpa (Heads of Agreement)
- Kyushu Electric Power Company: 1.0 mtpa (SPA)

🔹 Strategic Significance

Chevron’s LNG Growth Strategy
- Reinforces Chevron’s ambition to scale its LNG portfolio as global demand rises, especially in Asia and Europe.
- Aligns with previous LNG deals (e.g., West Coast Canada, Gorgon/Prelude in Australia, and Gulf Coast capacity).
Energy Transfer’s Project De-Risking
- Securing long-term offtake contracts is essential to greenlight the $12B+ Lake Charles LNG export project.
- Long-term contracts with investment-grade buyers like Chevron add credibility and bankability.
Broader Natural Gas Market Implication
- The U.S. is poised to become the world’s top LNG exporter by 2026.
- Projects like Lake Charles are part of the next wave of U.S. Gulf Coast LNG expansions.

🔹 Investment Insight

Chevron (CVX): Continues to be favored by hedge funds for its free cash flow strength, dividend yield, and LNG growth.
Energy Transfer (ET): This agreement may support re-rating if FID is reached, given growing long-term cash flow visibility from LNG exports.