Sempra signs SPA and HOA

Thursday, 24 November 2022
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Sempra Infrastructure and ConocoPhillips have signed a 20-year Sale and Purchase Agreement (SPA) for 5 mill tonnes per annum of LNG from Phase 1 of the planned Port Arthur LNG project under development in Jefferson County, Texas. 

Both companies have also entered into an equity sale and purchase agreement (SPA) whereby ConocoPhillips will acquire 30% of the equity in Port Arthur LNG Phase 1, and a natural gas supply management agreement in which ConocoPhillips will manage the feedgas supply requirements for the first phase.

"At Sempra, we certainly believe that great projects are the result of great partnerships," said Jeffrey Martin, Sempra’s Chairman and CEO. "That is why we are excited to announce a broad strategic relationship with ConocoPhillips, which has a growing global footprint across the LNG value chain. Together, we have a shared view of the role this facility can play in supporting global economies with energy supplies that advance both energy security and environmental goals."

"We are excited to partner with Sempra, and our participation in the Port Arthur LNG project will further enhance our portfolio as we continue to respond to global demand for reliable supply of natural gas," added Ryan Lance, Chairman and CEO of ConocoPhillips. "Sempra has a demonstrated track record of success and shares our commitment to a lower-carbon future."

Offtake HOA signed

Sempra Infrastructure has also entered into a heads of agreement (HOA) with US-based Williams for LNG offtake, plus the development of natural gas pipeline projects.

The HOA aims at the negotiation and finalisation of two 20-year long-term sale and purchase agreements (SPAs) for a total of about 3 mill tonnes per annum of LNG from Sempra’s Port Arthur LNG project and the Cameron LNG Phase 2 project.

Negotiations will also take place on a separate natural gas sales agreement for around 0.5 bill cu ft per day to be delivered in the Gillis, Louisiana area, as feed gas supply for the two LNG projects.

In addition, Sempra and Williams have agreed to form a joint venture to own, expand and operate the existing 2.35 bill cu ft per day Cameron Interstate Pipeline that is expected to deliver natural gas to the Cameron LNG Phase 2 project, as well as the proposed Port Arthur Pipeline Louisiana Connector that is expected to deliver natural gas to the Port Arthur LNG facility.

Phase 1 of Port Arthur LNG is already permitted and is expected to include two liquefaction trains and LNG storage tanks, as well as associated facilities capable of producing, under optimal conditions, up to about 13.5 mill tonnes per annum of LNG.

Sempra recently announced it is expecting to take a Phase 1 final investment decision (FID) in the first quarter of 2023. In addition, the company announced last month that it had 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 Phase 1.

The Cameron LNG Phase 2 project is expected to include a single LNG train with a maximum production capacity of 6.75 mill tonnes per year of LNG, as well as de-bottlenecking of the existing three LNG trains.

This project is also expected to include design enhancements resulting in a more cost-effective and efficient facility, while also reducing overall greenhouse gas emissions. 

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