Wednesday, 24 December, 2025 / Edition 90

May I take the opportunity to wish you and your loved ones a very happy holidays and a happy New Year!

Let’s look into two pieces of energy news from the past week.

Shangyou Nie

Editor, Well Read

Energy Transfers Suspends Lake Charles LNG Amidst a Supply Glut

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Energy Transfer announced that it is suspending development of the Lake Charles LNG project to focus on its gas pipeline and other energy projects. This is the latest sign of headwinds facing the LNG industry with a near-term market oversupply.

Energy Transfer’s decision:

• One week ago, Amy Chen Davis, ET’s vice president for LNG was reported saying that FID for Lake Charles LNG was expected for early 2026 at a Reuters-run energy conference.

• For the Lake Charles LNG project, ET said that it would welcome discussions with interested third parties.

• On the same day it announced the suspension, ET said it would increase the capacity of its Transwestern Pipeline from 1.5 to 2.3 billion cubic feet per day.

• The Desert Southwest Pipeline’s diameter will be enlarged from 42 to 48 inches to supply Permian Basin gas to customers in Arizona and New Mexico.

About Lake Charles LNG:

• Lake Charles LNG was set to have 16.5 million tonnes per annum of capacity.

• ET said that it was close to signing 15–15.5 million tonnes per annum in long-term supply contracts, advancing the project toward FID.

• Lake Charles LNG had secured long-term customers, including Chevron, Shell, Gunvor, China Gas, Kyushu Electric Power, and Saudi Aramco.

• In April, ET signed an agreement with MidOcean LNG, backed by EIG and Saudi Aramco, to provide 30 percent of the construction costs.

• Shell was one of the original lead developers, but it exited the $11-billion project in 2020 during COVID-19.

About Energy Transfer:

• ET is publicly traded on the NYSE and headquartered in Dallas, Texas.

• ET has a market cap of $56 billion and is ranked 53 on the Fortune 500 list.

• Its share price is down by 16.8 percent YTD.

• ET’s core business is oil and gas pipelines. It has a total of 140,000 miles of pipelines in the United States, in addition to terminals and storage facilities.

• It recently signed agreements to supply approximately 900 million cubic feet of gas per day to three Oracle data centers.

The bigger picture:

• There is growing concern that the number of new LNG projects coming on stream or having recently taken FID will lead to an LNG supply glut from 2026 to early 2030.

• Thus far in 2025, six new U.S. LNG projects reached FID, with a combined capacity of 60 million tonnes per annum, representing more than 70 percent of the new global total capacity FID-ed during the year.

•  Share prices for U.S. LNG-focused companies have been down in 2025, including Venture Global LNG (-74 percent YTD), Next Decade (-34 percent), and Cheniere (-14 precent).

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BlackRock Buys into 49.9 percent of ENI’s CCUS Unit

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Italian major ENI closed a deal to sell 49.99 percent equity of its CCUS business to Global Infrastructure Partners, a unit of investor powerhouse BlackRock. At a time when there is increasing doubt about some energy transition and low-carbon initiatives, the transaction shows BlackRock’s confidence in ENI’s satellite business model and CCUS.

About the deal:

• The deal was first announced in August.

• ENI will retain 50.01 percent majority ownership of the unit, which will be “jointly controlled” by ENI and GIP.

• According to ENI, the “strategic partnership” with GIP will:

  • Enhance the industrial potential and value of its CCUS portfolio projects

  • Reinforce ENI’s ambition to be a global leader in CCUS

  • Pave the way for future growth opportunities

• The deal has obtained all necessary approvals.

• Transaction amount was not disclosed.

ENI’s satellite business model:

• ENI’s satellite business model attempts to create independent entities focusing on a specific line of business.

• ENI then spins off these satellite businesses to attract third-party investments, while maintaining majority ownership and business control.

• ENI’s satellite companies include Enilive for biofuels, and Plentitude for renewable power, the sale of energy and energy solutions, and EV charging.

  • In March, private equity firm KKR paid 3 billion euros to buy into 25 percent of Enilive.

  • In December 2023, Energy Infrastructure Partners agreed to contribute 700 million in capital to join Plentitude.

• For upstream, ENI has created Vår Energi in Norway, Ithaca Energy in the United Kingdom, Azule Energy (with BP) in Angola and with Petronas in Indonesia and Malaysia.

• In February 2025, ENI CEO Claudio Descalzi said that his company would launch a CCUS company that aims to reach more than 15 million tonnes per year of CO2 storage capacity by 2030.

• Post 2030, ENI CCUS aims to grow the capacity to more than 40 million tonnes per year.

• ENI’s CCUS unit currently includes businesses in Italy, the United Kingdom, and the Netherlands.

• ENI’s share price is up 35 percent YTD in 2025, representing one of the best performing oil and gas stocks in the world.

• ENI has a market cap of $55 billion as of 22 December 2025.

About GIP and BlackRock:

• GIP was acquired by BlackRock in January 2024 for $12.5 billion.

• According to GIP, it has $183 billion in assets under management.

• On 14 August, GIP signed a $11-billion deal to join the Jafurah gas project, the largest non-associated gas project in Saudi Arabia.

• In September, GIP was reportedly to acquire U.S. utility company AES for $38 billion.

• On 15 October, GIP joined hands with The Artificial Intelligence Infrastructure Partnership (AIP) and MGX to acquire Texas-based Aligned Data Centers for $40 billion.

• On 14 November, GIP said that it would join a 50:50 joint venture with ACS to develop and operate “next generation data centers worldwide.”

• On 11 December, GIP sold its $2 billion holdings in Naturgy, a subsidiary of Repsol.

Why it matters:

• Where private equity companies decide to invest their capital is a key barometer for the energy industry.

• Several years ago, financial investors emphasized ESG and energy transition as key factors for their investment decisions. That sentiment has changed drastically in recent years, accelerated by the Russian invasion of Ukraine and Trump’s return to the White House.

• GIP’s latest multi-billion-dollar investment in ENI CCUS is particularly worth noting in the current environment.

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✉️ To get in touch with Shangyou, send an email to editorial@aapg.org.