Sempra Energy, Saudi Aramco Units Ink IPPA for Port Arthur LNG Export Facility

Sempra LNG and Aramco Services Company, subsidiaries of Sempra Energy and Saudi Aramco, have signed an interim project participation agreement (IPPA) for the Port Arthur LNG export project under development in Jefferson County, Texas.

Sempra Energy
Image Courtesy: Sempra Energy

The IPPA follows a heads of agreement announced in May last year for the purchase of 5 million tons per annum (Mtpa) of liquefied natural gas (LNG) and a 25% equity investment in the Port Arthur LNG project.

“Today’s announcement is a reflection of the growing alignment between our companies’ interest in the overall success of the Port Arthur LNG project,” Jeffrey W. Martin, chairman and CEO of Sempra Energy, said.

“The global demand growth for LNG is expected to continue in the coming years, and we see significant opportunities in this market. This agreement with Sempra Energy is another step forward for Saudi Aramco’s long-term gas strategy,” Amin H. Nasser, Saudi Aramco’s President and CEO, commented.

As informed, the initial phase of the Port Arthur LNG project is fully permitted and it is expected to include two liquefaction trains, up to three LNG storage tanks and associated facilities to enable the export of approximately 11 Mtpa of LNG on a long-term basis.

In 2019, Sempra LNG initiated the Federal Energy Regulatory Commission pre-filing review for a subsequent potential expansion of the proposed project that would add two additional liquefaction trains for a total export capacity of approximately 22 Mtpa of LNG.

“Port Arthur LNG is expected to play a critical role in helping shape the future of global energy trade,” Martin pointed out.

The definitive agreements in the Port Arthur LNG export project remain subject to finalization and corporate approvals by each party in its sole discretion before they are executed. Each party’s ultimate participation in the Port Arthur LNG export project also remains subject to the execution of related agreements and the fulfillment or waiver of certain conditions precedent contemplated by these agreements.

Port Arthur LNG is one of Sempra LNG’s five strategically located LNG development opportunities in North America and is in line with Sempra LNG’s goal of developing the LNG infrastructure needed to export 45 Mtpa of clean natural gas to the global LNG market.