Sempra updates on Port Arthur LNG work

US LNG exporter Sempra and compatriot engineering and construction firm Bechtel are moving forward with construction on the first phase of the Port Arthur LNG export project in Texas worth about $13 billion.

Sempra Infrastructure, a unit of Sempra, took a final investment decision in March last year for the first phase of its Port Arthur LNG export project.

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

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

Besides a 20-year LNG SPA for 5 million tonnes of LNG, US energy giant ConocoPhillips is a shareholder in the project with a 30 percent stake.

Last year, Sempra Infrastructure also completed the sale of a 42 percent non-controlling interest in its Port Arthur LNG Phase 1 project to compatriot private equity firm KKR.

Sempra Infrastructure has a controlling 28 percent indirect interest in Phase 1 at the project level.

Port Arthur LNG site (Image: Port Arthur LNG)
Port Arthur LNG site (Image: Port Arthur LNG)

13 mtpa

Bechtel won the EPC contract which includes building two trains with a total capacity of about 13 million tonnes per annum and two storage tanks with a capacity of 160,000 cbm.

Also, Bechtel awarded Port Arthur LNG contracts to Air ProductsElliott, and Great Lakes Dredge & Dock.

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

Sempra Infrastructure’s unit Port Arthur LNG said in a monthly status report filed with FERC that construction-related activities during April 2024 included soil stabilization activities, installation of concrete and sheet piling, foundation work erection of main pipe rack, steel structures, and the continued inspection and maintenance of ECD’s

According to Port Arthur LNG, Bechtel continued delivery of concrete piles by water and driving in train 1, train 2, tank A, tank B, ground flare, and utilities.

The firm said that Bechtel continued MOF construction activities, sheet piling for marine berth and berm.

Also, Bechtel continued foundation and grounding work for main pipe rack in ISBL train 1.

Becthel erected steel structure for main pipe rack in ISBL train 1, continued foundation and grounding work for main pipe rack in ISBL train 2, and continued to mobilize equipment and personnel to the project site.

During May, Bechtel will continue site preparation, soil stabilization, wick drain and structural fill placement, as well as continue with delivery of concrete piles, foundation and grounding work for main pipe rack in ISBL train 2, and construction of laydown areas.

Bechtel will also complete round lake canal crossing.

Port Arthur LNG site (Image: Port Arthur LNG)

Expansion

Besides the first phase, Sempra Infrastructure is also working on the second Porth Arthur LNG phase.

In September last year, Sempra Infrastructure won approval for the US FERC for the proposed Phase 2 project, that includes the addition of two liquefaction trains capable of producing up to 13 mtpa of LNG.

The development of the proposed project could increase the total liquefaction capacity of the facility from some 13 mtpa to about 26 mtpa.

The proposed project would also include an additional LNG storage tank and marine berth and would benefit from some of the common facilities currently under construction that were previously approved as part of the Phase 1 permitting process.

Justin Bird, CEO of Sempra infrastructure, said during Sempra’s second-quarter earnings call in August last year that the company has made “significant progress” on its LNG strategy and “are very bullish on both Port Arthur Phase 2 and Cameron Phase 2 moving forward next year.”

However, the Biden administration said in January it will pause pending decisions on exports of LNG to non-FTA countries until the Department of Energy can update the underlying analyses for authorizations.

DOE still needs to approve Sempra Infrastructure’s non-FTA application for the second phase of the Port Arthur LNG project.

Bird said in February during Sempra’s fourth quarter earnings call that Sempra is now awaiting the DOE non-FTA export permit.

“We’re continuing to work with Bechtel on an EPC agreement that can optimize efficiencies with the Phase 1 construction schedule,” he said.

“And we’re continuing our marketing efforts for offtake and equity and having financing discussions with potential lenders,” Bird said.

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