LNG

US major ConocoPhillips has agreed to acquire Marathon Oil Corp., the US company and main shareholder in Equatorial Guinea LNG in West Africa as well as a key operator in the major US shale basins.

Sempra Infrastructure, the subsidiary of California-based utility and energy company Sempra and with stakes in LNG plants and projects in the US and Mexico, has 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 Sempra Infrastructure.

Sempra said the sale was complete to KKR on a 42 percent indirect, non-controlling interest basis in the Port Arthur LNG Phase 1 project .

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

“The closing of this transaction continues the positive momentum of our world-class Port Arthur LNG facility and highlights Sempra Infrastructure's ability to access capital to support the growth of its infrastructure business,” said Justin Bird, Chief Executive of Sempra Infrastructure.

“We remain committed to developing energy infrastructure projects with strong partners to continue growing our portfolio while advancing global decarbonization and energy security,” Bird added.

James Cunningham, a Partner at KKR, said the firm was pleased to proceed with the investment.

“Port Arthur LNG Phase 1 has continued its strong momentum and is on track to meet its objectives of helping to deliver energy security, economic growth and a near-term supply of reliable and cleaner energy,” added Cunningham.

Texas FID

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

The company has additionally placed major long-lead time orders with equipment and technology companies Air Products and Baker Hughes.

The $13 billion total estimated capital expenditures for the Port Arthur project are being financed with $6.8Bln of non-recourse project-level debt and $6.2Bln of project-level equity.

The company noted that 100 percent of current contractable capacity for Port Arthur Phase 1 had been secured with long-duration contracts and high-quality counterparties.

“The expected commercial operation dates for Train 1 and Train 2 are 2027 and 2028 respectively,” Sempra said.

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 LNG export plant in Louisiana. 

Chart Industries Inc., a leading global engineering design and manufacturer of highly engineered equipment with LNG and industrial gas applications, is furthering its partnership with Canadian cleantech company Kathairos.

Sempra, the US utility whose LNG unit Sempra Infrastructure owns Cameron LNG in Louisiana and other projects in Texas and Mexico, has reported higher earnings in the first quarter as it proposed a five-year capital expenditure plan amounting to $40 billion.

Chart Industries Inc., the LNG equipment-maker and industrial gas technology company, has received a first-quarter 2023 boost as orders increased following its $4.4 billion acquisition of UK engineering firm Howden with both new branches of the company contributing and synergies already emerging.

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.

Sempra, the US utility whose LNG unit Sempra Infrastructure owns Cameron LNG in Louisiana and other projects in Mexico, has taken a positive final investment decision to build the Port Arthur liquefaction and export plant in Texas.

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.

Sempra Energy, the owner of the US Cameron LNG export plant in Louisiana, the Port Arthur venture in Texas and the Costa Azul liquefaction project in Mexico, has signed an preliminary accord to supply Poland with 2 million tonnes per annum of cargoes.

Sempra’s LNG unit has entered into a memorandum of understanding with the Polish Oil and Gas Company (PGNiG) for the cargoes from its portfolio projects in North America.

“We look forward to continuing to work with PGNiG to help meet their energy objectives from our strategically positioned LNG facilities and development projects on the Gulf and Pacific Coasts of North America,” said Justin Bird, Chief Executive of Sempra LNG.

Paweł Majewski, CEO of PGNiG, said his company valued its relationship with Sempra LNG and was keen to continue developing these ties.

“The MOU allows for shifting the volumes originally contracted at Port Arthur LNG to other facilities from Sempra's projects portfolio,” explained Majewski.

Sempra, based in San Diego, California, is also developing additional LNG facilities and carbon sequestration infrastructure along the value chain on the Gulf and Pacific Coasts.

Sempra explained that the Polish accord was non-binding and was completed in connection with the termination of a previous sale and purchase agreement (SPA) signed between the parties in 2018 that provided for 2 MPTA of LNG shipments to be delivered from the Port Arthur plant.

Sempra LNG owns a 50.2 percent interest in Cameron LNG, a three-Train export facility operating in Hackberry in Louisiana.

Sempra is currently considering the scale of a proposed expansion of the plant through one additional liquefaction Train with an offtake capacity of over 6 MTPA.

Sempra LNG along with its Mexican subsidiary, IEnova, and French major TotalEnergies are transforming the existing import terminal at Costa Azul in the state of Baja California into an export plant.

The first phase is already under construction and first production of LNG is expected by the end of 2024.

Sempra added that a potential Costa Azul expansion project was in the early stages of development.

Sempra Energy, operator of the Cameron LNG export plant in Louisiana and developer the Costa Azul venture in Mexico, has again delayed the final investment decision until 2022 on its third proposed export plant, the Port Arthur LNG project in Texas.

Sempra decided to delay the FID on the Port Arthur facility after originally scheduling the decision for around May 2020 until the market downturn pushed back the timetable and the signing of new customers.

“A final investment decision on Port Arthur LNG will likely move into next year, as we work with partners and customers to further reduce the greenhouse-gas emission profile of the project and evaluate the ongoing impacts of the Covid-19 pandemic on the global economy,” said Sempra.

“We remain confident in our view that the market will need additional supplies of LNG in the coming years and believe Sempra LNG projects are the leading candidates to supply this need,” added the San Diego, California-based company.

The project at Port Arthur in Jefferson County was authorized by the Federal Energy Regulatory Commission in April 2019 and involves the construction of two liquefaction Trains, each with capacity of 6.73 million tonnes per annum, the largest processing Trains among all the projects on the Gulf Coast.

Engineering and planning within the regulatory permitting process are continuing for the project.

Other Port Arthur facilities include two marine berths for LNG carriers with two LNG loading arms and two hybrid arms, condensate loading and truck facilities.

It additionally has permits for a construction and materials loading and unloading dock and three full-containment LNG storage tanks.

The Port Arthur LNG also has an expansion planned to include two additional Trains, each with its own gas treatment facilities and each capable of producing 6.73 MTPA, along with associated utilities and infrastructure.

All four Port Arthur Trains are expected to include one propane and one mixed refrigerant refrigeration GE Frame 7EA compressor turbine.

Each of the Trains will be equipped with an Acid Gas Removal Unit (AGRU) that utilizes an amine treatment process for acid gas removal.

Emissions from the AGRUs will be controlled using thermal oxidizers.

The Port Arthur project signed a fixed-price engineering, procurement and construction contract in March 2020 with US engineers Bechtel.

Sempra had also previously proposed to sell 5 MTPA of Port Arthur LNG to a unit of Saudi Aramco and take a 25 percent investment from the Saudis, while 2 MTPA has also been sold to the Polish Oil & Gas Company.