The potential for LNG project growth in Port Arthur got a boost this week following a potential corporate agreement announcement.
Sempra Infrastructure, a subsidiary of Sempra, has entered into a heads of agreement with Williams for the offtake of liquefied natural gas and development of associated natural gas pipeline projects to further connect abundant U.S. natural gas supplies in the Gulf Coast region to markets around the world.
The agreement contemplates negotiation and finalization of two 20-year 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 and the Cameron LNG Phase 2 project under development in Hackberry, Louisiana.
Port Arthur LNG has the potential to become one of the largest LNG export facilities in North America. Phase 1 of Port Arthur LNG is permitted and expected to include two liquefaction trains and LNG storage tanks, as well as associated facilities capable of producing, under optimal conditions, up to approximately 13.5 Mtpa of LNG.
Sempra Infrastructure is expecting to make a final investment decision for Phase 1 of the liquefaction project in the first quarter of 2023.
Additionally, the company announced last month it amended and restated its engineering, procurement and construction contract with Bechtel Energy for Phase 1.
Port Arthur LNG Phase 2 is being developed as a similarly sized project located adjacent to the Phase 1 project.
This week's heads of agreement, according to both companies, contemplates the negotiation of a separate natural gas sales agreement for approximately .5 billion cubic feet per day to be delivered in the Gillis, Louisiana area, as feed gas supply for the referenced LNG projects.
In addition, Sempra Infrastructure and Williams anticipate forming a strategic joint venture to own, expand and operate the existing 2.35 Bcfd Cameron Interstate Pipeline that is expected to deliver natural gas to the Cameron LNG Phase 2 project under development, as well as the proposed Port Arthur Pipeline Louisiana Connector that is expected to deliver natural gas to the proposed Port Arthur LNG facility.
"We are excited to continue advancing our U.S. Gulf Coast LNG and associated pipeline projects as we work to help satisfy a growing global demand for cleaner, more reliable energy sources," said Justin Bird, CEO of Sempra Infrastructure.
"We look forward to advancing our relationship with Williams, a like-minded company that shares our commitment to building a future of energy abundance, affordability and security."
Alan Armstrong, president and CEO of Williams, said this potential agreement is an opportunity to combine capabilities along the natural gas value chain.
He said it would increase the delivery of low-carbon, affordable and reliable natural gas from the wellhead to the growing international 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. "We look forward to being well aligned with Sempra Infrastructure's unique capabilities and competitive advantages in the LNG infrastructure space."
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