Sempra seals Port Arthur LNG supply deal with Germany’s RWE

A unit of German energy firm RWE has agreed to buy liquefied natural gas for a period of 15 years from Sempra Infrastructure’s proposed Port Arthur LNG project in Texas.

Sempra Infrastructure and RWE Supply & Trading signed a long-term sale and purchase agreement (SPA) for the supply of 2.25 million tonnes per annum on a FOB basis.

The supplies would come from the first phase of the Porth Artur LNG project, according to a statement by Sempra Infrastructure, a unit of Sempra.

This deal follows a heads of agreement the two firms announced in May.

It also provides a framework to explore ways to lower the carbon intensity of LNG produced from the Port Arthur LNG Phase 1 project through GHG emission reduction, mitigation strategies, and a continuous improvement approach, Sempra Infrastructure said.

Third LNG supply deal this month

This is the third LNG SPA Sempra infrastructure announced this month following the deal with UK’s Ineos and the contract with French energy firm Engie.

Sempra Infrastructure and ConocoPhillips also recently signed a 20-year sale and purchase agreement for 5 million tonnes per annum of LNG from the first phase of the Porth Arthur 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.

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.

Also, 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.

FID in Q1 2023

Sempra Infrastructure said it is focused on completing the remaining steps necessary to achieve its goal of making a final investment decision for Phase 1 of the liquefaction project in the first quarter of 2023, with first cargo deliveries expected in 2027.

“We could not be more excited to finalize our agreement with RWE as we continue supporting the energy security and environmental goals of our European customers,” said Justin Bird, CEO of Sempra Infrastructure.

“Because of its scale, location and permitting status, Port Arthur LNG is benefitting from a lot of commercial momentum with nearly all the projected off-take capacity for Phase 1 now under long-term agreements with some of the leading global energy companies. Today’s announcement moves us one step further along in the process of making Port Arthur LNG a reality,” he said.

German LNG imports

“Our partnership with Sempra Infrastructure, one of the leading companies for LNG infrastructure in the US, is another important step to diversify Germany’s gas supply and thus contributes to enhancing security of supply in Europe on a long-term basis,” said Andree Stracke, CEO of RWE Supply & Trading.

He added that thanks to the LNG supply contract with Sempra Infrastructure, the firm can also enlarge its international LNG portfolio.

RWE is expecting to receive the first commissioning cargo at the Elbhafen FSRU-based LNG import terminal in Brunsbuettel in January.

The Brunsbuettel project is one the fast-track FSRU-based developments Germany is working on in order to replace Russian pipeline gas supplies.

Germany’s first FSRU-based import facility in Wilhelmshaven, operated by Uniper, recently started supplying regasified LNG to the grid.

The Wilhelmshaven facility is the first of six FSRU-based terminals in Germany that are expected to go online by the end of 2023.

The government backed the charter of five FSRUs, including for the Brunsbuettel project, while Deutsche ReGas is developing the first private FSRU-based facility in Lubmin.

Brunsbuettel onshore LNG import terminal

Besides the Brunsbuettel FSRU-based project, RWE is also a shareholder in the planned Brunsbuettel onshore LNG import terminal, or the German LNG Terminal, and recently booked capacity at this facility.

RWE said in a separate statement that through the supply contract with Sempra Infrastructure, which corresponds to about 30 cargoes of LNG and some 3 billion cubic meters (Bcm) per year of natural gas, the company had secured sufficient LNG volumes to make full use of its booked regasification capacities at Brunsbuettel.

This onshore plant is expected to start operations towards the end of 2026.

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