US LNG player Sempra Infrastructure, a unit of Sempra, is expecting to take a final investment decision on the first phase of its proposed Port Arthur LNG project in Texas by the end of March.
The first phase of the Port Arthur LNG project will have two trains with a total capacity of about 13.5 million tonnes per annum and two storage tanks with a capacity of 160,000 cbm.
Sempra Infrastructure previously entered into long-term agreements with each of ConocoPhillips, Ineos, Engie, RWE, and the most recent with PKN Orlen.
The first phase of the project is fully subscribed with 10.5 Mtpa under binding long-term agreements.
Besides taking volumes, ConocoPhillips would acquire a 30 percent ownership interest in Port Arthur LNG Phase 1 as well.
In October last year, Sempra Energy announced that it finalized its fixed-price engineering, procurement and construction (EPC) contract for Port Arthur LNG Phase 1 with engineering anf construction giant Bechtel.
The two firms amended and restated the fixed-price contract which is now worth about $10.5 billion.
One or more investors
Justin Bird, CEO of Sempra infrastructure, said during Sempra’s 2022 earnings call on Tuesday that the company has completed the marketing phase for Port Arthur LNG Phase 1.
He confirmed that the firm is still targeting FID by the end of the first quarter.
“We have carefully structured this development project to reduce risk by fully contracting the long-term offtake securing a fixed price EPC and identifying world-class development partners,” he said.
With the completion of marketing and execution of the EPC contract, the company is now focused on finalizing the project level debt as well as equity financing.
“On the basis of the current financing efforts that are underway, we aim to efficiently raise lower-cost capital and protect Sempra Infrastructure’s investment-grade balance sheet,” he said.
“We are targeting Sempra Infrastructure Partners’ ownership in the project of between 20 percent and 30 percent with ConocoPhillips owning 30 percent and the balance being sold in the form of a non-controlling interest to one or more investors,” he said.
Second phase
Besides the first phase of the Port Arthur LNG project, Sempra Infrastructure is also working on the second phase of the project.
Port Arthur LNG’s expansion project would add two more liquefaction trains capable of producing about 13.5 mtpa.
Looking past the first phase of Port Arthur LNG and the second phase of the Cameron LNG project, Bird said during the call that “there is a lot of excitement around a second phase at Port Arthur.”
“We have MOUs for volumes out of Phase 2 and are discussions with many parties to fill any outstanding volumes,” he said.
“If you ask me the pecking order, I think the second phase at Port Arthur would be next,” he said.