US company Sempra Infrastructure has signed a heads of agreement (HOA) with oil major ConocoPhillips to jointly develop Sempra’s Port Arthur LNG project in Texas, US, the ECA LNG export project in Baja California, Mexico and other energy infrastructure in southeast Texas and Mexico.
Under the non-binding HOA, ConocoPhillips will take a 30% stake in phase 1 of Port Arthur LNG, which will have capacity of 13.5 million tpa, and may supply additional natural gas to the facility. The HOA also anticipates ConocoPhillips signing a a 20-year liquefied natural gas (LNG) tolling arrangement for 5 million tpa from phase 1. ConocoPhillips will also have the option to acquire LNG from future development phases of Port Arthur LNG, which may include additional LNG trains and low-carbon hydrogen infrastructure, as well as equity ownership.
In return, Sempra will have the opportunity to participate in any carbon capture and storage (CCS) projects developed by ConocoPhillips in Texas or Louisiana related to the Port Arthur LNG project. The project, which includes two natural gas liquefaction trains and LNG storage tanks is permitted, and Sempra is working with engineering firm Bechtel on the engineering, procurement and construction (EPC) contract. Phase 2, which will be a similar size, is under development.
Sempra says that the announcement of the HOA ‘marks an important milestone with the substantial completion of the marketing phase of Phase 1 of the Port Arthur LNG project.’
The HOA also covers collaboration for LNG offtake, natural gas supply and equity investment for Phase 2 of Sempra’s ECA LNG export development project, including up to one-third of the exported LNG volumes. The 3.25 million tpa ECA LNG phase 1 is currently under construction, with the first production expected by the end of 2024. Phase 2 is in early-stage development.
‘The decision to enter into this agreement with Sempra provides us with a ground-floor opportunity to participate in premier LNG developments, reinforcing our commitment to helping solve the world’s energy supply needs as we transition to a lower carbon future,’ says Ryan Lance, chairman and CEO of ConocoPhillips. ‘Sempra brings a long history of successful LNG project development, and we look forward to working together to provide reliable LNG to support the energy transition and strengthen US and global energy security.’
Sempra recently signed an HOA with Ineos Energy for the supply of 1.4 million tpa of LNG, which will come either from Port Arthur or from its other LNG project, Cameron LNG in Louisiana, US.
(Source: Tank Storage Magazine)