Sempra affiliate Sempra Infrastructure Partners and an affiliate of ConocoPhillips plan to jointly develop, construct, and operate a natural gas liquefication and export terminal in Port Arthur, Texas.
Total capital expenditures for Phase 1 of the project are estimated at $13 billion, the companies said.
The venture includes selling an “indirect, non-controlling interest” to an infrastructure fund managed by private-equity firm KKR. Additionally, Sempra closed on the project’s $6.8 billion non-recourse debt financing and the issuance of the final notice to proceed under the project’s engineering, procurement, and construction agreement.
“At Sempra, we believe bold, forward-looking partnerships will be central to solving the world’s energy security and decarbonization challenges,” Jeffrey W. Martin, Sempra chairman and CEO, said in a news release. “With strong customers, top-tier equity sponsors in ConocoPhillips and KKR, and a world-class contractor in Bechtel, this project has the potential to become one of America’s most significant energy infrastructure investments over time, while creating jobs and spurring continued economic growth across Texas and the Gulf Coast region.”
The Port Arthur LNG Phase 1 project is fully permitted and designed to include two natural gas liquefaction trains, two liquefied natural gas (LNG) storage tanks, and associated facilities with a nameplate capacity of approximately 13 million tonnes (14.3 million U.S. tons) per annum, the companies said.
“Sempra’s selection of Port Arthur as the location for a new natural gas liquefication and export terminal is a strategic decision that will cement Texas’ position as the energy capital of the world,” Texas Gov. Greg Abbott said. “With a highly skilled workforce and business-friendly climate, and as a national leader in LNG exports, Texas is the prime location to expand LNG operations to unleash the United States’ full economic potential in such a critical industry.
“Expanding LNG is imperative to American energy security, and the state of Texas looks forward to working alongside Sempra to advance this mission and bring more jobs and greater opportunities to hardworking Texans.”
The long-term contractable capacity of approximately 10.5 million tonnes per annum is fully subscribed under binding long-term agreements with strong counterparties—ConocoPhillips, RWE Supply and Trading, PKN ORLEN S.A., INEOS and ENGIE S.A., all of which became effective upon reaching a positive final investment decision (FID). Sempra Infrastructure also is actively marketing and developing the competitively positioned Port Arthur LNG Phase 2 project, which is expected to have similar offtake capacity to Phase 1.