LNG

Saudi Arabian Oil Company (Aramco), which recently signed two US LNG accords in Texas, has awarded contracts worth $25 billion to boost its own strategic natural gas production in the Middle East Kingdom.

Entergy Texas, one of the main power companies at the centre of the LNG export sector on the US Gulf Coast, has filed an application with the Public Utility Commission of Texas (PUCT) for approval to construct two natural gas-fired power plants to build up electric resiliency in the state.

Bechtel Energy, the leading US and global liquefied natural gas engineering and construction company, said it was looking to hire for more than 500 roles for the Port Arthur LNG export project in Texas as building gets underway.

Sempra, the US utility company with power and natural gas services centred on California and Texas and LNG developments in the US and Mexico through the Sempra Infrastructure subsidiary, reported a 25 percent drop in first-quarter profits as commodity prices fell along with revenues.

Saudi Arabian Oil Company (Saudi Aramco), the largest oil exporter, posted a 25 percent plunge in annual profits, though still increased its dividend for investors and outlined its plans to investment more in LNG and in domestic natural gas output.

Sempra, the US utility company with power and natural gas services centred on California and Texas and LNG developments in the US and Mexico through the Sempra Infrastructure subsidiary, reported a surge in net income for the year and the fourth quarter.

Sempra Infrastructure, a subsidiary of US utility Sempra and whose projects included Cameron LNG in Louisiana, Port Arthur LNG in Texas and Costa Azul LNG in Mexico, has signed a collaboration accord with the state-backed Japan Bank for International Cooperation (JBIC) covering future financial structuring opportunities.

Sempra said that through the memorandum of understanding, Sempra Infrastructure and JBIC aimed to further project structuring to improve the global energy supply chain through LNG and other decarbonization efforts in both the US and Japan.

“Sempra Infrastructure is thrilled to expand its collaboration with JBIC as we look forward to advancing projects that lower the carbon intensity of our energy delivery assets in North America,” said Justin Bird, Chief Executive of Sempra Infrastructure.

“We have built our relationships with customers and the export credit agencies in Japan over the past decade and are excited to expand our relationship with JBIC as we continue developing projects in support of our net-zero business,” Bird explained.

JBIC LNG role

“This collaboration will help us continue advancing our mission of developing energy infrastructure that provides access to safe, secure and affordable energy to our global partners,” the CEO declared.

Sempra noted that it had partnered in various ways with Japanese companies for many years.

“More recently, these partnership efforts are reflected in Sempra Infrastructure's Cameron LNG facility and a recently announced strategic collaboration with a Japanese consortium, which calls for an evaluation of potential enhancements of the energy supply chain through e-natural gas,” said Sempra.

“In addition, the company is developing the Hackberry Carbon Sequestration Project, which contemplates the participation of two Japanese companies. Both development projects are in close geographical proximity to the Cameron LNG facility,” Sempra stated.

As Japan's policy-based financial institution, JBIC has a mission to continue to financially support the creation of business opportunities for Japanese companies and to underpin the Asian nation’s energy security.

Mexico and Texas plants

Sempra Infrastructure in 2023 completed the sale of a stake in the Port Arthur LNG project in Texas to US asset management firm Kohlberg Karvis Roberts (KKR), which is already a stakeholder in the Infrastructure unit.

KKR now holds a 42 percent indirect, non-controlling interest share of the Port Arthur LNG Phase 1 project.

The transaction resulted in Sempra Infrastructure retaining a controlling 28 percent indirect interest in Port Arthur Phase 1 at the project level, and ConocoPhillips owning the remaining 30 percent interest.

The Sempra Infrastructure unit in 2023 reached a positive final investment decision for Port Arthur Phase 1 and contracted US engineering firm Bechtel Energy to build the facility.

Progress also continues at Energía Costa Azul LNG Phase 1 on the Pacific Coast of Mexico where construction at the Mexican export project remains on track to reach commercial operations by the summer of 2025.

The San Diego, California-based company is also pursuing a Phase 2 development project at the Cameron plant in Louisiana.

The American Gas Association (AGA), the industry group representing over 200 utility companies delivering natural gas throughout the US, said the Administration of President Joe Biden has moved to block pending approvals of liquid natural gas export permits to please climate activists in an election year.

“While hailed as a victory by climate advocacy groups, the decision could ultimately increase total global emissions, with US LNG having 50 percent lower supply chain emissions than Russian natural gas,” said the AGA.

“Natural gas has been the single biggest factor in reducing US greenhouse-gas emissions and could have the same effect around the world,” explained the AGA.

AGA President and Chief Executive Karen Harbert said the future shortages of American natural gas on global markets would result in higher energy costs for US allies, cause energy shortages in the developing world and would please other gas producers like Russia and Iran.

Economic growth

“The United States should not undercut our allies or fund our enemies with a policy that will increase global emissions and hamstring an engine of economic growth,” stated Harbert.

“Freezing approvals for LNG export terminals should be reconsidered immediately,” she said.

The AGA lobbies on behalf of the local energy utilities that deliver natural gas throughout the US to more than 77 million residential, commercial and industrial natural gas customers of which 73M customers receive their gas from AGA members.

“While some advocates against increasing LNG exports have suggested that sending more natural gas overseas could increase domestic prices for US consumers, the government’s own data disproves that theory,” said the AGA.

Analysis from the US Energy Information Administration have suggested that boosting LNG exports would have a minimal impact on US prices thanks to the significant quantities of natural gas available in the US.

Projects likely affected

Four key LNG export plants are expecting to be affected by the US Administration’s blocking policy.

The projects at risk of delay include at least one in Texas and three in Louisiana. They are Sempra Infrastructure’s Port Arthur venture as well as Commonwealth LNG, the Energy Transfer project at Lake Charles and Venture Global’s proposed Calcasieu Pass II (CP2) project.

The last review of US LNG export projects was in 2018, though Biden is seen having moved to act in an election year to boost his environmentalist credentials.

Biden warned that climate change was “the existential threat of our time” in his revised policy on LNG.

“During this period, we will take a hard look at the impacts of LNG exports on energy costs, America’s energy security and our environment,” the President declared.

LNG stabiliser

The AGA concluded that freezing American LNG export permits would have a slowing effect on US economic growth, taking away significant potential job growth while handing an economic victory to America’s adversaries overseas.

“Exports of LNG act as a stabilizing pull factor, with demand that encourages producers to avoid sharply reducing production when faced with low domestic prices,” the AGA noted.

The AGA was founded in 1918 and more than 100 years later in the 2020s natural gas met more than 30 percent of energy needs in the US.

Sempra, the US utility company with power and natural gas services centred on California and Texas and LNG developments in the US and Mexico through the Sempra Infrastructure subsidiary, posted solid third-quarter earnings and said it expected to increase capital investment by up to 20 percent above the current $40 billion over the next five years.

Sempra Infrastructure, the owner of the Cameron LNG plant in Louisiana and with other LNG interests in the US and Mexico, has named Tania Ortiz Mena has President of the company.