US LNG exporter Sempra Infrastructure, a unit of Sempra, and compatriot engineering and construction firm Bechtel have finalized a fixed-price engineering, procurement, and construction (EPC) contract for the second phase of the Port Arthur LNG export project in Texas.
Bechtel is already building the first phase of the Port Arthur LNG export terminal with a capacity some 13 mtpa under an EPC deal worth about $10.5 billion.
The development of the proposed second phase would increase the total liquefaction capacity of the facility to about 26 mtpa.
As part of the new EPC contract, Bechtel will perform the detailed engineering, procurement, construction, commissioning, startup, performance testing, and operator training activities for the project, according to a statement by Sempra Infrastructure.
The scope of the agreement also includes the ability to conduct pre-final investment decision work to better assure project cost and schedule certainty, it said.
Sempra Infrastructure did not provide the price tag of the new contract.
The development of the Port Arthur LNG Phase 2 project remains subject to a number of risks and uncertainties, Sempra Infrastructure said.
This includes completing the required commercial agreements, securing and/or maintaining all necessary permits, obtaining financing, and reaching a final investment decision, among other factors, it said.
“We are thrilled to achieve this milestone with Bechtel for the Port Arthur LNG Phase 2 development project and are confident that our continued collaboration with this world-class construction firm on the Port Arthur site will further strengthen our ability to execute this project,” said Justin Bird, CEO of Sempra Infrastructure.
In September last year, Sempra Infrastructure won approval for the US FERC for the proposed Phase 2 project, that includes the addition of two liquefaction trains.
However, the US Department of Energy still needs to approve Sempra Infrastructure’s non-FTA application for the project.
The Biden administration said in January it will pause pending decisions on exports of LNG to non-FTA countries until DOE can update the underlying analyses for authorizations.
Despite the permit pause, Saudi Arabia’s energy behemoth Aramco recently signed a non-binding deal with Sempra to buy LNG from the second phase of the Port Arthur project.
Under the heads of agreement, Aramco aims to buy 5 million tonnes per annum of LNG for 20 years from the Port Arthur LNG Phase 2 expansion project.
The HoA further contemplates Aramco’s 25 project participation in the project-level equity of the second phase.
In December 2022, UK’s Ineos also agreed to buy about 0.2 mtpa from the Port Arthur LNG Phase 2 project.
In March last year, Sempra Infrastructure, a unit of Sempra, took a final investment decision for the first phase of its Port Arthur LNG export project.
The first phase of the project is fully subscribed with 10.5 mtpa under binding long-term agreements.
Sempra Infrastructure entered into long-term agreements with each of ConocoPhillips, Ineos, Engie, RWE, and PKN Orlen.
Besides a 20-year LNG SPA for 5 mtpa of LNG, US energy giant ConocoPhillips is a shareholder in the project with a 30 percent stake.
Last year, Sempra Infrastructure also completed the sale of a 42 percent non-controlling interest in its Port Arthur LNG Phase 1 project to compatriot private equity firm KKR.
Sempra Infrastructure has a controlling 28 percent indirect interest in Phase 1 at the project level.
The company said in the new statement construction of the project continues to progress, and the expected commercial operation dates for train 1 and train 2 are 2027 and 2028, respectively.
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