Sempra progresses talks for remaining Port Arthur LNG volumes

In June, Saudi Arabia’s energy behemoth Aramco signed a heads of agreement with the US LNG exporter to buy 5 mtpa of LNG for 20 years from the project’s second phase.

The HoA further contemplates Aramco’s 25 project participation in the project-level equity.

Sempra Infrastructure, a unit of Sempra, and compatriot engineering and construction firm Bechtel recently also finalized a fixed-price engineering, procurement, and construction (EPC) contract for the second phase of the Port Arthur LNG export project.

Bechtel is already building the first phase of the Port Arthur LNG export terminal with a capacity some 13 mtpa under an EPC deal worth about $10.5 billion.

The development of the proposed second phase would increase the total liquefaction capacity of the facility to about 26 mtpa.

Answering a question regarding Port Arthur LNG Phase 2 during Sempra’s second-quarter earnings call on Tuesday, Justin Bird, CEO of Sempra infrastructure, said Bechtel is “doing incremental pre-FID work, and we’re excited to move this project forward while targeting cost and construction efficiencies by have them roll uninterrupted from Phase 1 to Phase 2.”

He said that the HoA with Aramco “demonstrates the global demand for LNG out of Port Arthur and more broadly, the value of low-cost and secure US LNG.”

“I might add that commercial discussions are progressing very well and there is a reasonable likelihood that the remainder of our volume is under similar HoA-type agreements in the coming months,” Bird said.

Bird said the company hopes to be in a position to “provide continued positive progress on our third quarter call.”

“From a permitting perspective, we’ve already received our FERC permit and FTA export, and we’re now awaiting the non-FTA export permit which, again, we do not expect to impact our FID decision timing,” he said.