Sempra, Bechtel ink $10.5 billion EPC contract for Port Arthur LNG

US LNG firm Sempra Infrastructure, a unit of Sempra, and compatriot engineering and construction firm Bechtel have executed the final EPC contract for the first phase of the proposed Port Arthur liquefaction project in Texas.

The two firms signed the original engineering, procurement and construction contract back in March 2020.

Now they have amended and restated the fixed-price contract which now is worth about $10.5 billion, according to a statement by Sempra Infrastructure.

Under the EPC contract, Bechtel would perform the detailed engineering, procurement, construction, commissioning, startup, performance testing and operator training activities for Phase 1 of the project.

The liquefaction project would consist of two liquefaction trains each capable of producing up to 6.73 mtpa. Sempra Infrastructure also plans a similarly sized second phase of the project.

Also, the first phase of the project includes three LNG storage tanks with a capacity of 160,000 cubic meters and a marine facility consisting of two berths for LNG vessels with a capacity of up to 266,000 cbm.

“Critical step” towards FID

Sempra Infrastructure still needs to take a final investment decision on the project.

“We are excited to achieve this milestone with Bechtel. The execution of the final contract is a critical step in advancing Phase 1 of Port Arthur LNG toward a final investment decision,” said Justin Bird, CEO of Sempra Infrastructure.

Earlier this year, US energy giant ConocoPhillips signed a preliminary deal with Sempra Infrastructure to buy a 30 percent direct equity holding in the project and an LNG offtake equivalent to about 5 mtpa.

Prior to this HOA, Sempra signed deals with German energy firm RWEUK’s Ineos, and Poland’s dominant gas firm and LNG importer, PGNiG, for volumes from the first phase of the LNG project.

Including this deal with ConocoPhillips, these HOAs total 9.65 mtpa to 11.65 mtpa of LNG from the first phase of the development, according to Sempra Infrastructure.

The firm also recently secured a 50-month extension from US energy regulators to build its 13.5 mtpa Port Arthur liquefaction project.

Sempra Infrastructure said the development of both phases of the Port Arthur LNG project is contingent upon completing the required commercial agreements, securing all necessary permits, obtaining financing, and reaching an affirmative final investment decision, among other factors.

Limited notice to proceed on or before November 15

Parent Sempra said in a separate filling to the stock exchange that Sempra Infrastructure “contemplates issuing a limited notice to proceed on or before November 15, 2022, to progress specified scopes of work”.

“If the full notice to proceed under the EPC contract is not issued by February 8, 2023, the EPC contract contemplates the possibility of owner issuing another limited notice to proceed which, if issued, would allow Bechtel to continue with the scopes of work previously authorized,” it said.

Each limited notice to proceed would set forth a maximum payment amount that would cap the owner’s exposure under such limited notices to proceed, Sempra said.

Prior to issuing the full notice to proceed, the EPC contract contemplates that Sempra Infrastructure would authorize Bechtel under the then-operative limited notice to proceed to access the site of the proposed first phase of the LNG project to perform certain preparatory site activities, it said.

(Article updated to include additional information.)

- Advertisements -

Most Popular

DSME cancels third LNG carrier order linked to Sovcomflot

South Korean shipbuilding giant Daewoo Shipbuilding and Marine Engineering has terminated an order for another LNG carrier after a...

Woodside delivers Australian LNG cargo to Germany’s Uniper via Dutch Gate terminal

LNG player Woodside said it had delivered an LNG cargo from its North West Shelf project in Australia to...

QatarEnergy, ConocoPhillips ink long-term LNG deal to supply Germany

State-owned QatarEnergy has signed two long-term contracts with US energy firm ConocoPhillips to supply Germany with liquefied natural gas...

More News Like This

Sempra and ConocoPhillips pen huge Port Arthur LNG supply deal

US energy giant ConocoPhillips has signed a deal with compatriot Sempra Infrastructure, a unit of Sempra, to buy in...

Sempra Infrastructure and Williams pen preliminary LNG deal

US LNG firm Sempra Infrastructure, a unit of Sempra, has entered into a heads of agreement with compatriot pipeline...

Bechtel-led coalition to study zero-flaring system at Egypt’s Idku LNG plant

US LNG engineering and construction giant Bechtel and its partners have won a feasibility study contract to assess implementation...

Cheniere completes third Sabine Pass jetty, Q3 earnings surge

US LNG exporting giant Cheniere reported a surge in its third-quarter earnings due to a strong LNG market, while...