LNG

Baker Hughes, the US liquefied natural gas equipment-maker and energy services company, has been awarded an order by Bechtel Energy to supply two main refrigerant compressors for the Port Arthur LNG export project in Texas.

The Port Arthur venture is being developed in the first phase by the Sempra Infrastructure unit of California-based Sempra in Jefferson County, Texas, after a positive final investment decision made on March 20.

Baker Hughes said it would supply four Frame 7 turbines paired with eight centrifugal compressors across two LNG Trains under the deal with engineering, procurement and construction contract-holder Bechtel.

The two large-capacity Trains at the Texas project will each produce over 6 million tonnes per annum for a nameplate capacity of around 13 MTPA in the first phase.

Baker Hughes added that it would also supply two electric motor-driven compressors for the plant’s boosting services.

Critical equipment

“We are delighted to be working with Bechtel and Sempra Infrastructure to supply critical equipment for this innovative LNG project,” said Baker Hughes Chairman and Chief Executive Lorenzo Simonelli.

“Baker Hughes has been committed to LNG for over 30 years, and the announcement builds on our track record of delivering high-availability and reliable LNG technology, with low total cost of operations, further enabling increased exports of LNG from the US Gulf Coast to meet global energy needs,” Simonelli added.

Baker Hughes noted that the Frame 7 turbine was well-proven for its energy efficiency, availability, reliability and maintainability.

“Packaging of the turbine-compressor Train, a unique Baker Hughes offering, as well as manufacturing of the compressors and testing of the Trains, will take place at Baker Hughes’ facilities in Italy,” explained the company.

Commercial start

“The expected commercial operation dates for Port Arthur LNG Phase 1 Train 1 and Train 2 are 2027 and 2028 respectively,” added Baker Hughes.

Total capital expenditure for the Port Arthur Phase 1 project is estimated at $13 billion.

Sempra explained that it had secured a joint venture with ConocoPhillips whereby an affiliate of the US major has acquired a 30 percent non-controlling interest in the project and is purchasing 5 MTPA of LNG offtake under a 20-year sale and purchase agreement.

Additionally, ConocoPhillips will be managing the Port Arthur project's overall natural gas supply requirements.

ConocoPhillips will also have certain rights to participate in future expansion projects in both equity and offtake.

Sempra has also reserved an indirect stake in Port Arthur LNG for US asset management firm Kohlberg Kravis Roberts , which is already a stakeholder in Sempra Infrastructure.

French major TotalEnergies and North American US LNG plant owner and developer Sempra are expanding their strategic alliance with the signing of an accord covering the Vista Pacífico LNG export project in Mexico.

The Vista Pacífico LNG project is planned to be a mid-scale facility on Mexico’s West Coast with cargoes pointing at the high-demand markets such as Asia and South America.

California-based Sempra, the main owner and operator of the Cameron LNG plant in Louisiana, has already signed a non-binding agreement with Mexico’s state-owned utility company, the Comisión Federal de Electricidad, for the potential joint development of this project

Sempra said the accord signed with TotalEnergies was in the form of a memorandum of understanding (MoU) for the French oil and gas company to offtake one-third of future LNG production at Vista Pacífico LNG and to become a shareholder in the project with a minimum stake of 16.6 percent.

Sempra’s development of Vista Pacífico LNG is in addition to its Energía Costa Azul LNG export project, which is transforming an existing import terminal into an export plant.

TotalEnergies and Sempra are already partners in the Cameron LNG plant in Hackberry, Louisiana and in the Cosa Azul project.

Global player

TotalEnergies is already one of the world’s leading LNG export developers and traders with interests in liquefaction plants in Angola, Australia, Egypt, the United Arab Emirates, Nigeria, Norway, Oman, Russia and Qatar. It is also developing the Mozambique LNG project.

Mexico’s other LNG export plans also include the US Mexico-Pacific Ltd (MPL) LNG project.

The MPL company is based in Houston and has joined with LNG engineering firm Bechtel Inc. on developing a liquefaction and export facility on the Pacific Coast using US natural gas as the feed gas and processing technology from ConocoPhillips.

The MPL plant is proposed for near Puerto Libertad in the northwest state of Sonora and would have just over 14 million tonnes per annum of output.

Sempra’s LNG interests have been transferred into the Sempra Infrastructure entity under a corporate restructuring and one of its shareholders is the US investment fund Kohlberg Kravis Roberts, now known as just KKR.

A second MoU with Sempra and TotalEnergies provides for the co-development of several renewable energy projects in North America.

This could see Sempra’s acquisition of 30 percent of the TotalEnergies equity interest in a wind project off the coast of California that is preparing for an upcoming auction.

“We are pleased to further strengthen our partnership with Sempra in North America in LNG and to extend it to renewables,” said Patrick Pouyanné, Chairman and Chief Executive of TotalEnergie.

“Over the past years, TotalEnergies has become the leading exporter of US LNG and has built up a pipeline of 4 gigawatts of solar projects and 3 GW of offshore wind projects currently under development in the US,” added Pouyanné.

Pembina Pipeline Corp., the Canadian pipelines company and joint owner of the Cedar floating liquefied natural gas project, has entered into definitive agreements valued at around US$9 billion with US investment giant Kohlberg Kravis Roberts (KKR) to combine their respective Western Canada natural gas processing assets into a single joint venture entity.

Sempra Infrastructure, the US company controlling Sempra LNG and its Cameron export plant at Hackberry in Louisiana and related assets in Mexico, has sold a 10 percent stake to the Abu Dhabi wealth fund in the United Arab Emirates.

Sempra Infrastructure, a new subsidiary of Californian utility Sempra Energy, said it was planning a second liquefied natural gas export plant on the Pacific Coast of Mexico.

Southern California Gas Co. (SoCalGas), based in Los Angeles and owned by the Louisiana Cameron LNG plant operator, Sempra Energy, has agreed to pay around $1.1 billion in three settlement agreements stemming from the methane leak in 2015 at the SoCalGas Aliso Canyon natural gas storage facility.

Sempra Energy has sold a 20 percent interest in the new business platform, Sempra Infrastructure Partners, to global equity fund Kohlberg, Kravis, Roberts (KKR) for $3.37 billion in cash.

“This transaction values Sempra Infrastructure Partners at around $25.2 billion, including expected asset-related debt at closing of $8.37Bln,” said Sempra, developer of the Cameron LNG export plant in Louisiana on the Gulf Coast and the Costa Azul project in northern Mexico.

In a series of transactions outlined at the end of 2020 that are intended to simplify Sempra Energy's non-utility infrastructure investments under one self-funding platform, the San Diego-based company combined the strengths of Sempra LNG and Sempra’s Mexican arm, IEnova.

“Over the next decade, we expect the energy markets in North America to continue to grow and become increasingly integrated,” said Jeffrey W. Martin, Chairman and Chief Executive of Sempra Energy.

“Combining our resources with KKR improves our ability to capture new investment opportunities in cleaner forms of energy and the critical infrastructure that stores and transports it,” added Martin.

The CEO explained that the transaction also sent a clear signal about the value and expected growth of its infrastructure portfolio.

“Investing in critical new energy infrastructure creates jobs, delivers reliable energy with fewer emissions and supports North America's economic recovery," said Raj Agrawal, KKR Partner and Global Head of Infrastructure.

“That is why we are excited to partner with Sempra Energy. This infrastructure platform provides a strong foundation to expand cleaner energy resources across the continent,” added Agrawal.

“Backed by strong, contractually-supported, long-term cash flows, our investment is also consistent with KKR Infrastructure's strategy to seek stable and predictable returns for our investors,” he stated.

The transaction is expected to be completed by mid-2021, subject to customary closing conditions, including consents from certain third parties and regulators.