HOUSTON Sempra Infrastructure and Tulsa-based Williams have agreed to explore development of natural gas and pipeline development projects in the Gulf Coast region.
A preliminary agreement contemplates negotiation and finalization of two long-term sale and purchase agreements for approximately 3 million tonnes per annum of LNG in the aggregate from the Port Arthur LNG project under development in Jefferson County, Texas, and the Cameron LNG Phase 2 project under development in Hackberry, Lousiana. According to a news release, Sempra and Williams anticipate forming a strategic joint venture to own, expand and operate the existing 2.35-billion-cubic-feet-per-day Cameron Interstate Pipeline expected to deliver natural gas to the Cameron LNG Phase 2 project, as well as the proposed Port Arthur Pipeline Louisiana Connector expected to deliver natural gas to the proposed Port Arthur facility.
The agreement also contemplates negotiation of a separate natural gas sales agreement for approximately 0.5 billion cubic feet per day to be delivered in the Gillis, Louisiana area, as feed gas supply for the LNG projects.
Williams CEO Alan Armstrong said the company views the strategic transaction with Sempra as an opportunity to combine capabilities of the two companies along the natural gas value chain and increase delivery of low-carbon, affordable and reliable natural gas to a growing world market.
"Facilitating the delivery of next generation natural gas to ease energy constraints at home and overseas, while also helping to meet domestic and global climate goals, is central to our natural gas focused strategy,” Armstrong said, “and we look forward to being well aligned with Sempra Infrastructure's unique capabilities and competitive advantages in the LNG infrastructure space."
Port Arthur LNG has the potential to become one of the largest LNG export facilities in North America, the companies said. Phase 1 of Port Arthur LNG is to include two liquefaction trains and LNG storage tanks, as well as associated facilities capable of producing up to approximately 13.5 Mtpa of LNG. Sempra Infrastructure recently announced it is expecting a final investment decision for Phase 1 of the liquefaction project in the first quarter of 2023.
Port Arthur LNG Phase 2 is being developed as a similarly sized project located adjacent to the Phase 1 project.
The Cameron LNG Phase 2 project is expected to include a single LNG train with a maximum production capacity of 6.75 Mtpa of LNG, as well as debottlenecking of three existing LNG trains.
The “heads of” agreement is a preliminary, non-binding arrangement, the companies said.
Sempra Infrastructure, with more than 2,000 employees, develops, builds, and operates clean power, energy networks and LNG and net-zero solutions.
Williams’ operations across the natural gas value chain touch on gathering, processing, interstate transportation, storage, wholesale marketing and trading. The company owns and operates more than 30,000 miles of pipelines systemwide and handles approximately 30% of natural gas used in the United States.