Last Updated on 27th June 2024
Aramco and Sempra announced that their respective subsidiaries had executed a non-binding Heads of Agreement (HoA) for a 20-year sale and purchase agreement (SPA) for liquefied natural gas (LNG) offtake of 5.0 million metric tons per year (Mtpa) from the Port Arthur LNG Phase 2 expansion project. The HoA further contemplates Aramco’s 25% participation in the project-level equity of Phase 2.
At the signing ceremony, from left: Aramco Executive Vice President of Gas Abdulkarim A. Al-Ghamdi, Sempra Chairman and CEO Jeffrey W. Martin, Aramco President & CEO Amin H. Nasser, Aramco Upstream President Nasir K. Al-Naimi, and Sempra Infrastructure President of LNG Martin Hupka.
Port Arthur LNG is a natural gas liquefaction and export terminal in southeast Texas with direct access to the Gulf of Mexico. The Port Arthur LNG Phase 1 project is currently under construction and consists of trains 1 and 2, as well as two LNG storage tanks and associated facilities. The Port Arthur LNG Phase 2 project is a competitively positioned expansion of the site to include the addition of up to two trains capable of producing up to 13 Mtpa.
The parties expect to execute a binding LNG SPA and definitive equity agreements with terms substantially equivalent to those in the HoA, with the SPA and equity agreements subject to several conditions.
Nasir K. Al-Naimi, Aramco Upstream President, said, “We are excited to take this next step into the LNG sector. As a potential strategic partner in the Port Arthur LNG Phase 2 project, Aramco is well-placed to grow its gas portfolio to meet the world’s growing need for lower-carbon energy sources. This agreement is a major step in Aramco’s strategy to become a leading global LNG player.”
At the heart of Sempra Infrastructure’s flagship Port Arthur Energy Hub, Port Arthur LNG can expand to eight trains, positioning it as one of the world’s most significant LNG export facilities. The facility is expected to enhance global energy security and resilience. Moreover, Sempra Infrastructure is actively advancing infrastructure projects within the Port Arthur Energy Hub, addressing the rising demand for lower-carbon fuels and reducing carbon intensity. This includes the proposed Titan Carbon Sequestration Project.
The Port Arthur liquefaction project includes two natural gas liquefaction trains capable of producing, under optimal conditions, up to approximately 13.5 million metric tons per annum (mtpa), up to three LNG storage tanks and ancillary support facilities to liquefy and load LNG onto ships.
The project would use a portion of Sempra’s property along the Sabine-Neches ship channel in Port Arthur, Texas, that provides direct access to the Gulf of Mexico. Additionally, a 3-mile portion of Highway 87 between the Intracoastal Waterway and Keith Lake Pass, which extends to the community of Sabine Pass, would be relocated to accommodate the project and built to Texas Department of Transportation standards.
Bechtel, one of the top 10 Construction Companies in the USA, is the project's engineering, procurement, and construction (EPC) contractor. The development of the Port Arthur LNG liquefaction project is contingent upon obtaining customer commitments, completing the required commercial agreements, securing all necessary permits, obtaining financing, incentives, and other factors, and reaching a final investment decision.
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