Saudi Aramco and Sempra Energy sign HoA for proposed LNG project

SUBSIDIARIES of energy infrastructure company Sempra Energy and Saudi Aramco, Saudi Arabia’s state-owned oil and gas company, have signed a heads of agreement (HoA) for offtake and a 25% stake in what could be one of the largest LNG export projects in North America.

The proposed Port Arthur LNG Phase 1 project is to include two liquefaction trains, up to three LNG storage tanks, and associated facilities to allow for long-term export of about 11m t/y of LNG. The project is also expected to have potential expansion capabilities of up to eight liquefaction trains, equivalent to a capacity of about 45m t/y. The project is to be located in Texas, US.

The HoA agreement between Sempra LNG and Aramco Services Company is in anticipation of a definitive 20-year LNG sale-and-purchase agreement (SPA) for 5m t/y of LNG offtake from the Port Arthur LNG Phase 1 project. The agreement also includes negotiation and finalisation of 25% equity ownership in Sempra’s project.

Jeffrey W Martin, Chairman and CEO of Sempra Energy, said: “…we are developing one of the largest LNG export infrastructure portfolios in North America.”

“We are pleased to partner with affiliates of Saudi Aramco, the largest oil and gas company in the world, to advance the development of Sempra LNG's natural gas liquefaction facility in Texas and enable the export of American natural gas to global markets.”

Amin Nasser, CEO and President of Saudi Aramco, said the agreement is: “a major step forward in Saudi Aramco’s long-term strategy to become a leading global LNG player. With global demand for LNG expected to grow by around 4% per year, and likely to exceed 500m t/y by 2035, we see significant opportunities in this market, and we will continue to pursue strategic partnerships which enable us to meet rising global demand for LNG.”

Earlier this month, the Port Arthur LNG gained authorisation from the US Department of Energy to export domestically-produced natural gas to countries without US trade agreements. In April, the Federal Energy Regulatory Commission authorised the port and its affiliates to site, construct, and operate the liquefaction export facility and related natural gas pipelines.

Port Arthur LNG is part of Sempra LNG’s goal to deliver 45m t/y of clean natural gas to the global LNG market.