Sempra Energy and Saudi Aramco, through their subsidiaries Sempra LNG and Aramco Services, have signed a heads of agreement (HOA).


Image: The agreement is expected to finalise a 25% equity investment in Phase 1 of Port Arthur LNG. Photo: Courtesy of Saudi Arabian Oil Co.

US-based energy infrastructure company Sempra Energy and Saudi Arabian petroleum and natural gas company Saudi Aramco, through their subsidiaries, have jointly signed a Heads of Agreement (HOA) on Port Arthur LNG.

Sempra Energy’s subsidiary Sempra LNG and Saudi Aramco’s subsidiary Aramco Services have signed the HOA.

The HOA is intended to propose negotiation and finalisation of a definitive 20-year liquefied natural gas (LNG) sale-and-purchase agreement (SPA) for five million tonnes per annum (Mtpa) of LNG offtake from Phase 1 of the Port Arthur LNG export-project under development.

The agreement also covers the negotiation and finalisation of a 25% equity investment in Phase 1 of Port Arthur LNG

Saudi Aramco CEO and president Amin Nasser said: “The agreement with Sempra LNG 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 500 million metric tons a year 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.”

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

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

Sempra Energy chairman and CEO Jeffrey W Martin said: “At Sempra Energy, we are developing one of the largest LNG export infrastructure portfolios in North America, with an eye towards connecting millions of consumers to cleaner, more reliable energy sources.

“We are pleased to partner with affiliates of Saudi Aramco, the largest oil & 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.”

Recently, the US Department of Energy has authorised Port Arthur LNG to export domestically produced natural gas and the US Federal Energy Regulatory Commission has authorised the Port Arthur LNG associates to construct and operate the liquefaction export facility and related natural gas pipelines.