Sempra Launches $13 Billion Port Arthur LNG Project
Sempra Infrastructure Partners, a subsidiary of Sempra (NYSE: SRE) (BMV: SRE), has made a final investment decision (FID) for the development, construction, and operation of Phase 1 of its Port Arthur LNG liquefaction and export project in Jefferson County, Texas.
This project, which has already received approval from the U.S. Federal Energy Regulatory Commission, includes two natural gas liquefaction trains and two liquefied natural gas storage tanks, with a combined capacity of approximately 13 million tons per annum (Mtpa). Train 1 and Train 2 are expected to commence commercial operations in 2027 and 2028, respectively.
The long-term contract capacity of about 10.5 Mtpa is fully subscribed under binding long-term agreements with ConocoPhillips, RWE Supply & Trading, PKN ORLEN S.A., INEOS, and ENGIE S.A.
Total capital expenditures for the Port Arthur Phase 1 project are estimated at $13 billion.
Sempra Infrastructure has also completed its joint venture with a subsidiary of ConocoPhillips and announced an agreement to sell an indirect, non-controlling interest in the project to a fund managed by KKR. The company is actively marketing and developing the competitively positioned Port Arthur LNG Phase 2 project, which is expected to have similar offtake capacity as Phase 1.
"With strong customers, significant equity backing from ConocoPhillips and KKR, and a top-tier contractor in Bechtel, this project has the potential to become one of America's most significant energy infrastructure investments over time, while creating jobs and spurring continued economic growth across Texas and the Gulf Coast region," said Jeffrey W. Martin, chairman and CEO of Sempra.
Phase 1 is expected to create approximately 5,000 highly skilled jobs during construction and boost the economies of Port Arthur and Jefferson County.
"Sempra's choice of Port Arthur as the site for a new natural gas liquefaction and export terminal is a strategic decision that will solidify Texas' position as the energy capital of the world," said Texas Governor Greg Abbott. "With a highly skilled workforce and a business-friendly environment, Texas is the ideal place to expand LNG operations and unlock the U.S.'s full economic potential in this critical industry. Growing LNG is essential to American energy security, and the State of Texas looks forward to working alongside Sempra to advance this mission and bring more jobs and greater opportunities to hardworking Texans."
