Sempra, Ineos ink Port Arthur LNG supply deal

UK’s Ineos has agreed to buy about 1.4 million tonnes per year of LNG from Sempra Infrastructure’s proposed Port Arthur LNG project in Texas.

In June this year, Ineos Energy, a unit of Ineos, and Sempra Infrastructure signed a heads of agreement in order to negotiate a definitive LNG supply deal.

Now the two firms signed a long-term sale and purchase agreement (SPA) for the supply of 1.4 million of tonnes per year from the first phase of the Porth Artur LNG project for a period of 20 years, according to a statement by Sempra Infrastructure.

Additionally, the companies have signed a non-binding heads of agreement for Ineos’ potential purchase of an additional 0.2 mtpa from the Port Arthur LNG Phase 2 project under development.

“We are excited to finalize our commercial relationship with Ineos as a valued long-term LNG off-taker from the Port Arthur LNG Phase 1 development project,” Justin Bird, CEO of Sempra Infrastructure, said in the statement.

“We look forward to advancing this project so we can begin delivering new supplies of US LNG to our European partners, as they pursue more secure energy for their customers,” Bird said.

German LNG supply

Ineos previously said the long-term FOB agreement marks Ineos’ entry into the global LNG market, and builds on the company’s “leadership position” in exporting ethane from the US.

The firm, along ConocoPhillips and RWE, recently booked long-term capacity at the planned onshore LNG import terminal in Brunsbuettel, Germany, expected to go online in 2026.

Ineos said in a separate statement on Monday that the LNG supplies would start in 2027 and the company plans to deliver the fuel to the Brunsbuettel facility.

“This long-term contract with Sempra Infrastructure and the agreement for regasification capacity in Brunsbuettel secure the key areas of the value chain for Ineos across the Atlantic corridor,” Brian Gilvary, chairman of Ineos Energy, said.

This is the second LNG supply deal related to the Brunsbuettel facility this week.

Earlier this week, state-owned QatarEnergy has signed two long-term contracts with US energy firm ConocoPhillips to supply Germany with LNG.

Under the deals, Germany would receive about 2 million tons of LNG per year at the Brunsbuettel facility, with the first shipment expected in 2026.

Port Arthur FID in Q1 2023

Sempra Infrastructure, a unit of Sempra, is planning to take a final investment decision for the first phase of the Port Arthur liquefaction project in Texas in the first quarter of 2023, with first cargo deliveries expected in 2027.

The company recently announced that it had finalized its fixed-price engineering, procurement and construction (EPC) contract for Port Arthur LNG Phase 1 with Bechtel.

The two firms amended and restated the fixed-price contract which now is worth about $10.5 billion.

The liquefaction project would consist of two liquefaction trains each capable of producing up to 6.73 mtpa. As stated above, 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.

Sempra Infrastructure and ConocoPhillips recently signed a 20-year sale and purchase agreement for 5 million tonnes per annum (mtpa) of LNG from Phase 1 of the project.

In addition, the two firms have entered into an equity sale and purchase agreement whereby ConocoPhillips will acquire 30 percent of the equity in the first phase of the project.

Sempra also signed deals with German energy firm RWE, and Poland’s dominant gas firm and LNG importer, PGNiG, for volumes from the first phase of the LNG project.

(Article updated to include a statement by Ineos.)

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