Sempra Energy, Saudi Aramco Sign Huge LNG Deal for Port Arthur LNG

port-arthur-lngImage Courtesy: Sempra Energy

Subsidiaries of Sempra Energy and Saudi Aramco have signed a heads of agreement (HOA) which anticipates the negotiation and finalization of a definitive 20-year LNG sale-and-purchase agreement.

The deal, signed between Sempra LNG and Aramco Services Company, covers 5 million metric tons each year from the Port Arthur LNG export project under development.

It also includes the negotiation and finalization of a 25% equity investment in Phase 1 of Port Arthur LNG.

“If converted to a sales and purchase agreement (SPA), this will be one of the largest LNG deals ever signed and the largest deal signed since 2013,” Giles Farrer, Wood Mackenzie Research Director, said commenting on the deal.

“If the deal is completed, this is likely to mean the Port Arthur facility can proceed to FID by the end of 2019 or early 2020,” he added.

“The agreement with Sempra LNG is a major step forward in Saudi Aramco’s long term strategy to become a leading global LNG player,” Amin Nasser, Saudi Aramco’s CEO & President, pointed out.

“We are pleased to partner with affiliates of Saudi Aramco … 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,” Jeffrey W. Martin, Chairman and CEO of Sempra Energy, said.

The proposed Port Arthur LNG Phase 1 project is expected to include two liquefaction trains, up to three LNG storage tanks and associated facilities that should enable the export of approximately 11 Mtpa of LNG on a long-term basis.

Port Arthur LNG could be one of the largest LNG export projects in North America, with potential expansion capabilities up to eight liquefaction trains or approximately 45 Mtpa of capacity.

Earlier this month, Port Arthur LNG received authorization to export domestically produced natural gas to countries that do not have a free trade agreement with the US.

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