Energy Central-News Article

A subsidiary of San Diego-based Sempra just received federal approval to expand a big liquefied natural gas facility it is building on the Texas Gulf Coast.

The Federal Energy Regulatory Commission gave Sempra Infrastructure the OK for Phase 2 expansion of the Port Arthur LNG project, a move company officials described as a "major regulatory milestone" that could lead to the facility doubling its capacity.

Sempra Infrastructure has become a major player in the liquefied natural gas, or LNG, market in which facilities take gas, cool it to minus 260 degrees Fahrenheit, load it onto cargo tanks on double-hulled ships and then export the LNG to international destinations.

Phase 1 of the $13 billion Port Arthur project is already under construction in Jefferson County, Texas, and is designed to include two huge storage tanks and a pair of LNG processing units, called "trains" in the parlance of the industry. With FERC approval for Phase 2 now in place, the facility could increase output from 13 million metric tons a year to 26 million, add two more trains, another storage tank and marine berth.

"Today's FERC order is a significant step in our ability to advance the global energy transition, creating an opportunity to double the amount of secure and reliable U.S. natural gas that Port Arthur LNG can help deliver to global markets," Sempra Infrastructure CEO Justin Bird said in a statement.

Not everyone cheered the news. Port Arthur is home to multiple refineries, energy and petrochemical plants and the Port Arthur Community Action Network is opposed to further development in the area.

"Thanks to FERC, Sempra emissions will significantly add more toxins, more pollution into our air, inflicting more suffering on people who have little means to fight back against billion-dollar companies or the government," John Beard, the group's CEO, said in an email to the Union-Tribune.

Not far from Port Arthur LNG, Sempra Infrastructure also operates and is the majority owner of Cameron LNG, a $10.5 billion export facility on the Gulf Coast of Louisiana that opened in August 2020.

Anne Rolfes is director of the Louisiana Bucket Brigade, a group opposed to LNG projects on the Gulf Coast. "You might lose a half day of shrimping because a tanker is passing because the Coast Guard forces you to get out of the way for navigation reasons," Rolfes said. "Also, these tankers will stir up mud and make it cloudy in the water and you can't shrimp or fish in that environment either."

LNG supporters say natural gas has helped reduce net global greenhouse gas emissions because natural gas is a much cleaner fuel than coal, although climate activists say exporting LNG extends the world's dependence on fossil fuels.

The LNG market has taken a higher profile in the aftermath of Russia's war in Ukraine. Russia's state-owned natural gas company, Gazprom, supplied about 40 percent of the gas that heated European homes and powers businesses prior to the invasion. Since then, European Union countries have scrambled to make deals with LNG exporters in other countries.

Asian countries such as Japan and South Korea have also been reliable buyers of global LNG.

In addition to Port Arthur and Cameron, Sempra Infrastructure is also building an export component to an already existing LNG terminal near Ensenada, Mexico, called Energía Costa Azul, that is expected to be completed by mid-2025.

The company is also working with the Mexican government to build two other LNG export terminals — one in the port city of Topolobampo on the Gulf of California and another in the seaside town of Salina Cruz in the state of Oaxaca.

Port Arthur LNG is looking to reduce its carbon intensity through a proposed Titan Carbon Sequestration project that is still in the developmental phase.

A subsidiary of Sempra, a Fortune 500 company, Sempra Infrastructure is based in Houston.

Earlier this month, the company completed a financial deal with with the New York investment firm KKR, in which KKR will have a 42 percent non-controlling interest of Port Arthur Phase 1. Sempra Infrastructure retains a controlling 28 percent indirect interest in Phase 1 while ConocoPhillips owns the remaining 30 percent.

This story originally appeared in San Diego Union-Tribune.