California-based Sempra and its subsidiary Sempra Infrastructure are moving forward with their plans to develop the Port Arthur, Texas LNG liquefaction plant to expand U.S. LNG export capabilities. Sempra has previously announced several customer contracts and yesterday reported that it has entered into agreements with energy major ConocoPhillips to purchase LNG from Phase 1 as well as acquire an equity stake in the project and manage the proposed facility.
Port Arthur LNG has the potential to become one of the largest LNG export facilities in North America. Previously, Sempra has said a final investment decision on the project would be completed by the first quarter of 2023.
Sempra reported that it has established a broad strategic relationship with ConocoPhillips for the first phase of the new LNG facility. The Port Arthur LNG Phase 1 project is permitted and expected to include two natural gas liquefaction trains and LNG storage tanks, and associated facilities capable of producing, under optimal conditions, up to approximately 13.5 Mtpa of LNG. A similarly sized Port Arthur LNG Phase 2 project is also competitively positioned and under active marketing and development.
ConocoPhillips has executed a 20-year Sale and Purchase Agreement for 5 million tonnes per annum (Mtpa) of liquefied natural gas from Phase 1 of the proposed Port Arthur LNG project. It was also agreed that ConocoPhillips will acquire 30 percent of the equity in Phase 1 of Port Arthur LNG and a natural gas supply management agreement whereby ConocoPhillips will manage the feedgas supply requirements for Phase 1 of the proposed liquefaction facility.
Last month, Justin Bird, CEO of Sempra Infrastructure said that based on robust customer interest, Sempra was convinced that the Port Arthur LNG project is highly attractive to the global market. The company announced that it is expecting to make a final investment decision for Phase 1 of the liquefaction project in the first quarter of 2023.
Development of Phase 1 and Phase 2 of the Port Arthur LNG project is contingent on completing the required commercial agreements, securing all necessary permits, obtaining financing, and reaching an affirmative final investment decision, among other factors, reports Sempra.
Non-binding agreements were previously announced with the Polish Oil & Gas Company (PGNiG), RWE Supply & Trading, INEOS Energy Trading Ltd., and ConocoPhillips. Last week, Sempra announced a further offtake agreement with Williams for approximately 3 million tonnes per annum of LNG in the aggregate from the Port Arthur LNG project and the Cameron LNG Phase 2 project under development in Hackberry, Louisiana.
Also laying the groundwork for the Port Arthur project, Sempra has finalized an engineering, procurement, and construction contract with Bechtel Energy for Phase 1. Under the terms of the contract, Bechtel will perform the detailed engineering, procurement, construction, commissioning, startup, performance testing, and operator training activities.