Sempra Infrastructure and RWE ink U.S. LNG supply deal

Sempra Infrastructure and RWE ink U.S. LNG supply deal

U.S. LNG company Sempra Infrastructure and German utility RWE have signed a deal for the purchase of 2.25 million tonnes per annum (MTPA) of LNG.

Artist rendering of Port Arthur LNG facility; Courtesy of Port Arthur LNG
Sempra Infrastructure and RWE ink U.S. LNG supply deal
Artist rendering of Port Arthur LNG facility; Courtesy of Port Arthur LNG

On 25 May 2022, Sempra Infrastructure, a subsidiary of Sempra, said in a statement it entered into a heads of agreement (HOA) with RWE Supply & Trading, a subsidiary of RWE, for the purchase of approximately 2.25 MTPA of LNG. The LNG is to be supplied on a long-term, free-on-board basis from the Port Arthur LNG Phase 1 project under development in Jefferson County, Texas.

The HOA contemplates the negotiation and finalization of a definitive 15-year LNG sale and purchase agreement for 2.25 MTPA to be delivered from the Port Arthur LNG project. Additionally, the parties agreed to work toward a broad framework for the reduction, mitigation, and reporting of GHG emissions associated with deliveries of LNG from the Port Arthur LNG project.

Sempra Infrastructure’s LNG projects are uniquely positioned to help provide U.S. LNG to support the energy security of America’s allies in Europe, while also accelerating the transition to a lower-carbon future,” said Justin Bird, CEO of Sempra Infrastructure. We see opportunities to work together with RWE across the energy transition, including LNG, hydrogen, and renewables. With today’s agreement, we make significant progress toward the development of our Port Arthur LNG project and remain committed to lowering GHG emissions across the LNG value chain through the use of new technologies and the improvement of key processes.”

Andree Stracke, CEO of RWE Supply & Trading added: Our partnership can contribute largely to securing significant LNG volumes for the RWE portfolio on a long-term basis while building the basis for supplying low carbon gas in the future.”

Phase 1 of the Port Arthur LNG project is fully permitted. It will include two liquefaction trains and LNG storage tanks, as well as associated facilities capable of producing, under optimal conditions, up to approximately 13.5 MTPA of LNG.

The HOAs are preliminary, non-binding arrangements. The development of the Port Arthur LNG project remains subject to a number of risks and uncertainties. These include reaching definitive agreements, maintaining all necessary permits, finalising engineering and construction arrangements, obtaining financing and incentives, and reaching a final investment decision.

Related Article

Sempra Infrastructure globally advancing lower carbon LNG

Sempra Infrastructure says it is currently exceeding its goal of operating its existing LNG infrastructure at a GHG emissions intensity that is 20 per cent below its 2020 baseline. In 2021, it achieved a 28 per cent reduction. In addition to continuing to reduce emissions in operations, Sempra is developing lower emissions technologies for infrastructure assets. 

The company entered into a memorandum of understanding with Entergy Louisiana to develop options to accelerate the deployment of cost-effective renewable energy to power its infrastructure located in the vicinity of the Gulf Coast.

Moreover, it is developing Hackberry Carbon Sequestration; a proposed carbon sequestration facility in Southwest Louisiana that is to have the potential to sequester up to two MTPA of CO2 from LNG and other industrial facilities in the region.

In addition to lowering emissions at its own facilities, Sempra Infrastructure is working with other companies to reduce GHG emissions across the U.S. natural gas value chain. It is a founding member of Veritas, a GTI Energy Differentiated Gas Measurement, and Verification Initiative.

The company is also a sponsor of The Collaboratory to Advance Methane Science, a research collaboration to advance technological solutions to enable methane emission reductions.

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