LNG

Sempra Infrastructure, a subsidiary of California utility company Sempra, has signed a long-term LNG sale and purchase agreement (SPA) with a central European fuels group that recently acquired the Polish Oil & Gas Company.

The Sempra deal with the Poles is for the supply of 1 million tonnes per annum of LNG cargoes on free-on-board basis for 20 years from the first phase development of the Port Arthur export project in Texas.

The Port Arthur LNG first phase project located in Jefferson County, Texas, has all of its necessary permits and is expected to include two large liquefaction Trains, each with 6.75 MTPA of output, as well as LNG storage tanks and associated facilities for total production of 13.5 MTPA.

A similarly sized Port Arthur LNG second-phase project with another 13.5 MTPA of output is also under active marketing and development.

The SPA with the Polish company, Polski Koncern Naftowy Orlen (PKN Orlen), means that the first phase of the Port Arthur project is now fully subscribed for the limit Sempra has set itself.

In aggregate, the first phase of Port Arthur LNG is now subscribed for 10.5 MTPA under binding long-term agreements.

This leaves Sempra, which also operates the Cameron LNG plant in Louisiana, with room to supply own possible marketing operations.

The full Port Arthur development plan, the Texas facility is aiming for first cargo deliveries in 2027.

“We are excited to partner with PKN Orlen, Central Europe's largest energy group, as they continue to look for long-term, diverse supplies of secure energy sources,” said Justin Bird, Chief Executive of Sempra Infrastructure.

“With the long-term off-take capacity for Phase 1 now sold under binding agreements, we expect to reach a final investment decision later this quarter and commence construction,” added Bird.

Daniel Obajtek, CEO of PKN Orlen, said he was delighted to enter into this long-term agreement with Sempra.

“This is an important step towards strengthening PKN Orlen’s position as a cornerstone of crude and fuel supply security in Central and Eastern Europe,” declared Obajtek.

“Already last year, during a very tense situation on the EU energy market, the US became one of the main suppliers of natural gas to Poland,” he noted.

Sempra Infrastructure has previously entered SPAs with leading European energy and utility companies as well as the US major ConocoPhillips.

They include the German and French utilities RWE and Engie along with European chemicals company INEOS.

Sempra Infrastructure, a subsidiary of California-based Sempra, has signed another long-term sale and purchase agreement, its third in recent weeks, and this time with French utility Engie.

European chemicals company INEOS has signed a 20-year contract with Sempra Infrastructure for the supply of about 1.4 million tonnes per annum of LNG from the US Port Arthur project under development in Texas.

INEOS added that under the agreement it had signed up for 1.4 MTPA from Phase 1 of the project and also signed a non-binding heads of agreement for the potential purchase of an additional 0.2 MTPA from the Port Arthur LNG Phase 2 project under development.

The first deliveries from the US Gulf Coast plant are expected in 2027.

INEOS noted that it also signed a contract for long-term regasification capacity in a proposed German onshore LNG terminal at Brunsbüttel on the Elbe River north of Hamburg.

“These agreements mark INEOS’s entry into the global LNG market. The company is a first mover among European corporates as it secures competitive sources of energy to meet its own needs and those of its customers in Europe,” stated the company.

The agreements come at a critical time for energy markets and will provide much needed security of supply for Europe.

Brian Gilvary, Chairman of INEOS Energy, said the agreements were very important for the company.

Atlantic corridor

“This long-term contract with Sempra and the agreement of regasification capacity in Brunsbüttel secures the key areas of the value chain for INEOS across the Atlantic corridor and represents a major step forward in the INEOS Energy journey at a time of significant transformation in the energy industry,” explained Gilvary.

The Port Arthur LNG project is a fully permitted facility on a 3,000-acre site in Jefferson County, Texas.

It is expected to include two natural gas liquefaction trains and LNG storage tanks and associated facilities capable of producing up to 13.5 MTPA from an initial two liquefaction Trains.

The Brunsbüttel import terminal near the Kiel Canal is being developed by the company, German LNG Terminal GmbH.

It will have initial an annual throughput capacity of 8 billion cubic metres of natural gas per year and may be expanded to at least 10 Bcm.

US major ConocoPhillips and QatarEnergy will combine to provide 2 million tonnes per annum of LNG to Germany’s new onshore import terminal under development at Brunsbüttel on the Elbe River.

US energy company Sempra, operator of the Cameron LNG export plant in Louisiana, has signed an amended engineering, procurement and construction (EPC) contract with engineering firm Bechtel Energy for the Port Arthur LNG export project in Texas.

Bechtel and the Sempra unit, Sempra Infrastructure, have amended the EPC contract for the proposed Phase 1 liquefaction project in Jefferson County in Texas to a new price of approximately $10.5 billion.

“The execution of the final contract is a critical step in advancing Phase 1 of Port Arthur LNG toward a final investment decision,” said Justin Bird, Chief Executive of the Sempra Infrastructure unit.

“Based on robust customer interest, we know that Port Arthur LNG is highly attractive to the global market and we look forward to providing customers with access to secure, abundant and reliable US LNG,” added Bird.

Paul Marsden, President of Bechtel, said the firm was delighted to continue its partnership with Sempra after constructing the Cameron export plant at Hackberry.

“Alongside Sempra Infrastructure, Bechtel is ready to continue active construction in the Gulf Coast and bring more opportunities to the local region” added Marsden.

Contract scope

The Sempra EPC contract with Bechtel covers engineering, procurement, construction, commissioning, start-up, performance testing and operator training activities for Phase 1 of the new Texas plant.

The Port Arthur Phase 1 project has all its permits and is expected to include an initial two liquefaction Trains with a combined 13.5 million tonnes per annum of output.

Sempra said it was already working on a similarly-sized Port Arthur LNG Phase 2 project with “active marketing” taking place. This would take total production eventually to 27 MTPA.

California-based Sempra has signed a series of supply deals for Port Arthur Phase 1 involving four companies.

They are the Polish Oil & Gas Company, the German utility RWE Supply & Trading, UK chemicals company INEOS and US major ConocoPhillips.

The Sempra Infrastructure unit of Sempra also contains the other LNG assets like the Cameron plant and the Costa Azul export project in Mexico.

Earlier in 2022 Sempra agreed to sell a 10 percent interest in Sempra Infrastructure Partners to a subsidiary of the Abu Dhabi Investment Authority (ADIA), the wealth fund in the United Arab Emirates, for $1.78Bln in cash.

The San Diego-based utility business of Sempra includes San Diego Gas & Electric Co. and Southern California Gas Co. 

German LNG Terminal GmbH, the development company of the onshore import facility at Brunsbüttel on the Elbe River south of the port of Hamburg and adjacent to the Kiel Canal, has signed up three leading energy companies as long-term foundation customers for regasification capacity.