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June 26, Aramco and Sempra announced that their respective subsidiaries have executed a non-binding Heads of Agreement (HoA) for a 20-year sale and purchase agreement for liquefied natural gas offtake of 5.0 million tonnes per annum (Mtpa) from the Port Arthur LNG Phase 2 expansion project. The HoA further contemplates Aramco’s 25% participation in the project-level equity of Phase 2.
“We are excited to take this next step into the LNG sector,” Aramco Upstream President Nasir K. AlNaimi said. “As a potential strategic partner in the Port Arthur LNG Phase 2 project, Aramco is well placed to grow its gas portfolio with the aim of meeting the world’s growing need for lower-carbon sources of energy. This agreement is a major step in Aramco’s strategy to become a leading global LNG player.”
Sempra Chairman and CEO Jeffrey W. Martin shared similar excitement for the agreement.
“The planned expansion of Port Arthur LNG would help facilitate the broad distribution of U.S. natural gas across global energy markets,” he said. “By expanding the global reach of the Port Arthur LNG facility, we have the opportunity to improve energy security, while providing a lower-carbon alternative to coal for electricity production.”
Port Arthur LNG is a natural gas liquefaction and export terminal in Southeast Texas with direct access to the Gulf of Mexico. The Port Arthur LNG Phase 1 project is currently under construction and consists of trains 1 and 2, as well as two LNG storage tanks and associated facilities. The Port Arthur LNG Phase 2 project is a competitively positioned expansion of the site to include the addition of up to two trains capable of producing up to 13 Mtpa.
Cited at the heart of Sempra Infrastructure’s flagship Port Arthur Energy Hub, Port Arthur LNG has stated potential to expand to a total of eight trains, which would position it as one of the world’s most significant LNG export facilities. The facility is expected to play an important role in enhancing global energy security and resilience. Moreover, Sempra Infrastructure is actively advancing infrastructure projects within the Port Arthur Energy Hub, addressing both the rising demand for lower-carbon fuels and carbon intensity reduction. This includes the proposed Titan Carbon Sequestration project.
Texas Speaker of the House Dade Phelan applauded the agreement as a boon for his home community of Southeast Texas.
“Texas is a powerful force in the thriving LNG market – supplying affordable, reliable energy to our nation and partners around the world – and this strategic partnership between Sempra and Aramco would bolster our edge in this crucial industry,” Phelan said. “Southeast Texas is proudly home to the Port Arthur LNG project, which once completed will position our region as a hub for delivering LNG to markets around the globe. LNG exports contribute tremendously to our state and nation’s dominance in the energy market, and importantly, support good-paying jobs and investments in our Southeast Texas communities.
“The Texas Legislature is working to ensure the Texas oil and gas industry continues to provide innovative solutions to our evolving energy needs for years to come. I thank Sempra for contributing to the growth of Texas LNG exports and Aramco for its interest in investing in the Port Arthur Phase 2 project and our Southeast Texas community.”
This spring, Phelan created the House Select Committee on Protecting Texas LNG Exports to examine the impacts of the temporary pause on export permits for LNG announced in January. The five-member committee issued an interim report in May that identifies recommendations to address the challenges posed by the federal suspension, including increased funding for maritime infrastructure and utilization of regional workforce grants through local colleges, among others.