US energy giant ConocoPhillips has acquired a 30% stake in Phase 1 of compatriot Sempra Infrastructure’s Port Arthur liquefied natural gas export project in Texas, that is closing in on the final investment decision.
Sempra confirmed the acquisition on Tuesday and also that it has now signed a 20-year sales and purchase agreement for 5 million tonnes per annum of LNG with ConocoPhillips from the Port Arthur Phase 1 project in Jefferson County.
The duo also signed a natural gas supply management agreement where ConocoPhillips will manage the feed gas supply requirements for Phase 1 of the proposed Port Arthur liquefaction facility.
“We are excited to partner with Sempra, and our participation in the Port Arthur LNG project will further enhance our portfolio as we continue to respond to global demand for reliable supply of natural gas,” ConocoPhillips chief executive Ryan Lance said.
“Sempra has a demonstrated track record of success and shares our commitment to a lower-carbon future.”
Sempra expects to take the final investment decision for this project phase in the first quarter of next year. The company has awarded Bechtel the engineering, procurement and construction contract for Port Arthur LNG Phase 1, with the US contractor lined up for the detailed engineering, procurement, construction, commissioning, start-up, performance testing and operator training activities.
Port Arthur LNG Phase 1 project is expected to include two liquefaction trains and LNG storage tanks, and associated facilities capable of producing, under optimal conditions, up to about 13.5 million tpa of LNG.
“A similarly sized Port Arthur LNG Phase 2 project is also competitively positioned and under active marketing and development,” Sempra said.
However, development of both phases is contingent on completion of the required commercial agreements, securing all necessary permits and obtaining financing, the project’s operator conceded.
“At Sempra, we certainly believe that great projects are the result of great partnerships,” Sempra chief executive Jeffrey W Martin said.
“That is why we are excited to announce a broad strategic relationship with ConocoPhillips, which has a growing global footprint across the LNG value chain. Together, we have a shared view of the role this facility can play in supporting global economies with energy supplies that advance both energy security and environmental goals.”
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