Extending the real estate lease option agreements between the Port of Lake Charles and Lake Charles LNG proves the company still wants to pursue a final investment decision for its export facility, Richert Self, port director, said Monday.
Port board members agreed to extend the lease option agreements for two years. One agreement involves 160 acres of land near the export facility site at the Industrial Canal. Self said the port owns 120 acres, with the remaining 40 acres owned by Prairie Land Co.
Another agreement involves a 25-acre port-owned site on Lincoln Road, which Lake Charles LNG will use to provide a parking area for construction workers.
"They're just paying the port for the option to lease the land whenever they make their final investment decision," Self said.
The lease option for the 160-acre site costs Lake Charles LNG $210,000 annually, Self said. Significant payments like these show that the liquefaction project remains viable, he said.
"With the drop in oil prices and COVID-19, I think a lot of people were pessimistic about these projects," Self said. "If (Lake Charles LNG) is willing to put up the money, they must feel pretty positive about it. They're still forging ahead."
Shell announced in late March that it would not move forward with an equity investment in the Lake Charles LNG liquefaction project because of "current market conditions." Officials with Energy Transfer Partners, a U.S. pipeline operator, said it would assume responsibility as the project's lead developer.
Earlier in the meeting, the board moved for Carl Krielow to serve as its president for one year, starting July 1. Tom Lorenzi will serve as the board's vice president. Keith Prudhomme will be secretary treasurer, with Judy McCleary serving as assistant secretary treasurer.