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Sempra, Saudi Aramco sign nonbinding deal for supply from Port Arthur LNG

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Sempra, Saudi Aramco sign nonbinding deal for supply from Port Arthur LNG

Subsidiaries of Sempra Energy and Saudi Arabian Oil Co. entered into a nonbinding agreement that may lead to a 20-year LNG supply deal for Sempra's Port Arthur LNG export project and a 25% equity investment in the project's first phase.

Under the heads of agreement, Sempra LNG LLC and Aramco Services Co. Inc. would negotiate and finalize an LNG sale and purchase agreement for 5 million tonnes per annum of supply from the Port Arthur LNG terminal in Texas, according to a May 22 news release. The 25% equity investment would also help advance project development, according to Sempra.

The planned Port Arthur LNG Phase 1 would involve the construction of two liquefaction trains, up to three LNG storage tanks and associated facilities, for a total export capacity of about 11 mtpa of LNG. The terminal may also be expanded to up to eight liquefaction trains, or 45 mtpa of capacity, making it one of the largest LNG export projects in North America.

The project on May 2 received authorization from the U.S. Department of Energy to export locally produced natural gas to countries without a free trade agreement with the U.S. The Federal Energy Regulatory Commission approved Port Arthur LNG in April. The project has yet to receive a final investment decision, which is expected in 2019, and first LNG production is scheduled for 2023.