In March last year, Sempra Infrastructure, a unit of Sempra, made a final investment decision for the first phase of its Port Arthur LNG export project worth around $13 billion.
The first phase of the project is fully subscribed at 10.5 million tonnes per annum under binding long-term agreements.
Sempra Infrastructure has signed long-term contracts with ConocoPhillips, Ineos, Engie, RWE and PKN Orlen, respectively.
In addition to a 20-year LNG SPA for 5 million tons of LNG, the US energy giant ConocoPhillips is a 30 percent shareholder in the project.
Last year, Sempra Infrastructure also completed the sale of a 42% minority stake in its Port Arthur Phase 1 LNG project to private equity firm KKR.
Sempra Infrastructure has an indirect majority stake of 28 percent in Phase 1 at the project level.
Dredging and LNG tank construction
Bechtel won the EPC contract, which includes the construction of two trains with a total capacity of approximately 13 mtpa and two storage tanks with a capacity of 160,000 cbm.
The expected commercial operating dates for Train 1 and Train 2 are 2027 and 2028, respectively.
Sempra Infrastructure's Port Arthur LNG unit said in its monthly status report filed with FERC that construction-related activities in November 2024 included piling, foundations, steel erection, LNG tank construction, above-ground/underground pipe installation, etc
Dredging work at the berth.
Port Arthur LNG said in the August construction report that dredging work had begun on the marine berth.
Last year, US company Great Lakes Dredge & Dock secured the dredging contract from Bechtel.
In November, Bechtel continued site preparation, soil stabilization (including DMM), wick dewatering, aggregate filling/removal, and structural fill placement.
The company said Bechtel continued site preparation, soil stabilization (including DMM), wick drainage, aggregate filling/removal, and structural fill placement
Bechtel also continued to drive piles in the OSBL and Train 2 areas and build loading platforms, while the project also began receiving equipment shipments at the Material Offloading Facility (MOF).
In addition, the contractor continued the construction of LNG tanks.
According to a separate FERC filing, Port Arthur LNG received approval to begin construction on the roofs of LNG tanks A and B.
In December, Bechtel will continue site preparation, soil stabilization, wick drainage and structural fill placement.
Bechtel will also continue shipbuilding activities on the loading platform and the construction of LNG tanks, among other things.
Extension
In addition to the first phase, Sempra Infrastructure is also working on the second LNG phase at Porth Arthur.
In September last year, Sempra Infrastructure received US FERC approval for the planned Phase 2 project, which includes the addition of two liquefaction trains capable of producing up to 13 million tonnes of LNG per year.
Development of the proposed project would increase the plant's total liquefaction capacity from approximately 13 million tonnes per year to approximately 26 million tonnes per year.
The proposed project would also include an additional LNG storage tank and boat berth and would benefit from some of the shared facilities currently under construction that were previously approved under the Phase 1 permitting process.
In July, Sempra Infrastructure and Bechtel entered into a fixed-price engineering, procurement and construction (EPC) contract for the second phase of the Port Arthur LNG export project.
According to a statement from Sempra Infrastructure, under the new EPC contract, Bechtel will carry out the detailed engineering, procurement, construction, commissioning, commissioning, performance testing and operator training for the project.
Sempra Infrastructure said the scope of the agreement also includes the ability to make final investment decisions in advance to better ensure project costs and schedule certainty.
The development of the Port Arthur LNG Phase 2 project remains subject to a number of risks and uncertainties, it said.
This includes, but is not limited to, entering into necessary commercial agreements, securing and/or maintaining all necessary approvals, obtaining financing and making a final investment decision.
The U.S. Department of Energy has yet to approve Sempra Infrastructure's non-FTA application for the project.
The Biden administration announced in January that it would pause decisions on LNG exports to non-free trade agreement countries until the DOE could update the underlying analysis for permits.
Justin BirdCEO of Sempra Infrastructure, recently said the company expects to receive DOE non-free trade agreement export approval for the second phase of its Port Arthur LNG export project in Texas in the first half of 2025.
Aramco deal
In June, Saudi Arabia's energy giant Aramco signed a non-binding deal with Sempra to purchase LNG from the second phase of the Port Arthur LNG export project.
Under the agreement, Aramco intends to purchase 5 million tonnes of LNG per year for 20 years from the Port Arthur LNG expansion project.
The HoA is also considering the participation of Aramco's 25 projects in the project-level equity participation of the second phase, the two companies said.
Sempra and Aramco expect to enter into a binding LNG SPA and definitive participation agreements with terms substantially similar to those in the HoA, with the SPA and participation agreements subject to a number of conditions, they said.
Sempra recently said that commercial discussions to sell the remaining offtake volumes from Port Arthur's second LNG phase were progressing “very well.”
“As noted on our second quarter call, we have seen increased interest in Port Arthur 2, and I am pleased to say that interest has continued to increase since the call,” Bird said during Sempra's third quarter call Quarter.
Bird said: “The momentum continues to increase with commercial offtake discussions and project participation underway and I think we are seeing better terms.”