Sempra takes FID on Port Arthur LNG project

US LNG player Sempra Infrastructure, a unit of Sempra, has taken a final investment decision for the first phase of its Port Arthur LNG export project in Texas worth about $13 billion.

Sempra announced this decision in a statement late on Monday saying that it has also closed the project’s $6.8 billion non-recourse debt financing.

The firm recently said that it expected to sanction the project in March.

The first phase of the Port Arthur LNG project will have two trains with a total capacity of about 13 million tonnes per annum and two storage tanks with a capacity of 160,000 cbm.

Total capital expenditures for the Port Arthur Phase 1 project are estimated at $13 billion.

Also, the first phase of the project is fully subscribed with 10.5 Mtpa under binding long-term agreements.

Sempra Infrastructure previously entered into long-term agreements with each of ConocoPhillips, Ineos, Engie, RWE, and the most recent with PKN Orlen.

Bechtel to build Port Arthur LNG project

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.

Sempra said in the statement that it has issued a final notice to proceed to Bechtel for the project.

It expects the project to create an estimated 5,000 highly skilled jobs during construction and boost the economies in Port Arthur and Jefferson County.

The expected commercial operation dates for Train 1 and Train 2 are 2027 and 2028, respectively.

JV with ConocoPhillips

Besides a 20-year LNG SPA for 5 million tonnes of LNG, US energy giant ConocoPhillips is now also a shareholder in the project.

Sempra said that the two firms finalized their JV and that ConocoPhillips now completed the purchase of a 30 percent non-controlling interest in Port Arthur LNG.

ConocoPhillips is also managing the project’s overall natural gas supply requirements.

In addition, ConocoPhillips will also have certain rights to participate in future expansion projects in both equity and offtake.

Sempra Infrastructure said it is actively marketing and developing the competitively positioned Port Arthur LNG Phase 2 project, which is expected to have similar offtake capacity as the first phase.

KKR deal

Sempra also announced an agreement to sell an indirect, non-controlling interest in the project to an infrastructure fund managed by KKR.

KKR will acquire a 25 percent to 49 percent indirect, non-controlling interest in the Port Arthur LNG Phase 1 project, according to Sempra.

Pursuant to the agreement with KKR, Sempra Infrastructure will retain certain economic and other rights with respect to the interest being transferred while granting KKR certain minority interest protections.

KKR is making the investment primarily through its Global Infrastructure Investors IV fund.

The completion of the KKR sale remains subject to regulatory approvals and other customary closing conditions.

Sempra Infrastructure is targeting 20 percent to 30 percent of indirect ownership interest in the project, subject to the closing of the KKR sale, it said.

This is the second large LNG export project in the US to take a final decision this year after Venture Global LNG’s FID on the second Plaquemines LNG phase.

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