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Lake Charles LNG Export Project Update

Stocks in this article: ETEETP

Energy Transfer Equity, L.P. (NYSE: ETE) and Energy Transfer Partners, L.P. (NYSE: ETP) (collectively, “Energy Transfer”) and BG Group (LSE: BG.L) announced today that they have entered into a project development agreement (PDA) to jointly develop the liquefied natural gas (LNG) export project at the existing Trunkline LNG import terminal in Lake Charles, Louisiana.

The announcement follows the Department of Energy conditionally granting authorization to Energy Transfer and BG Group to export from the existing Trunkline LNG import terminal up to 15 million metric tonnes per annum (mtpa) of LNG to non-free trade agreement nations.

The proposed project will include the construction of three liquefaction trains and will use the existing LNG storage and marine berthing facilities owned by Trunkline LNG Company, LLC (a wholly-owned subsidiary of Energy Transfer). Energy Transfer has secured all property rights required for the site of the liquefaction facility.

The project is being developed to liquefy domestic supplies of natural gas for export to meet growing global demand for LNG. Exporting LNG to world markets is expected to provide economic and employment related benefits for the U.S., including approximately 250 operational positions and several thousand jobs during the project’s construction phase.

The PDA sets forth the commercial arrangements between the parties and a final investment decision to proceed with the project is expected to be made in 2015.

Energy Transfer will own and finance the proposed new liquefaction facility, and BG Group will have a long-term tolling agreement with Energy Transfer for the offtake, although BG Group may choose to assign some of its capacity or offtake to third parties. Trunkline Gas Company, LLC (a wholly-owned subsidiary of Energy Transfer), will provide pipeline transportation services to supply natural gas to the project.

BG Group views Lake Charles as an attractive, low cost LNG supply option and is one of the most advanced LNG development projects in its portfolio. BG Group will oversee the engineering and design and will manage construction of the facility, as well as operate the combined facility. The project’s front end engineering and design (FEED) study being done by Technip is well advanced. The project is in the Federal Energy Regulatory Commission’s (FERC) “pre-filing” environmental review process, with the parties currently expecting to file a formal application with the FERC by the end of the first quarter of 2014.

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