ConocoPhillips has signed an agreement to buy four million metric tons per annum (MMtpa) over 20 years from Sempra’s Port Arthur LNG Phase 2 project in Jefferson County, Texas.
ConocoPhillips had already committed to five MMtpa over 20 years from the under-construction first phase, from which it has also agreed to acquire a 30 percent equity stake.
“Under the [phase 2] agreement, ConocoPhillips will offtake LNG over a 20-year term on a free-on-board basis, supporting the company’s ability to reliably deliver natural gas to customers in key global markets”, Houston, Texas-based ConocoPhillips said in an online statement Thursday.
San Diego, California-based energy infrastructure company Sempra said separately, “With momentum in the project’s development, Sempra continues to target making a financial investment decision on Phase 2 in 2025”.
In July Sempra entered into a 20-year agreement to supply 1.5 MMtpa of LNG from phase 2 to Japan’s JERA Co. Inc. on a free-on-board basis.
In June Sempra and Saudi Arabian Oil Co. (Aramco) progressed a heads-of-agreement document on phase 2 into a memorandum of understanding (MOU) under which the state-owned oil giant plans to purchase five MMtpa for 20 years. The MOU also provides for Aramco’s potential acquisition of a 25 percent interest.
“The role of U.S. LNG in meeting the energy security needs of America’s allies continues to grow”, Sempra chair and chief executive Jeffrey W. Martin said in Thursday’s announcement.
Through an order from the Department of Energy (DOE) in May, Port Arthur LNG Phase 2 marked the resumption of federal permitting for LNG export to countries without a free trade agreement with the United States following a pause by the previous administration.
Phase 2, which will consist of trains 3 and 4, is now permitted to export the equivalent of 698 billion cubic feet a year of natural gas, or about 13.5 MMtpa of LNG according to Sempra, to FTA and non-FTA countries on a non-additive basis until 2050. Sempra received the FTA portion of the permit July 2020.
Phase 1, which consists of trains 1 and 2, had received a permit to export the same volume to FTA and non-FTA countries until 2050. Sempra expects to start up trains 1 and 2 in 2027 and 2028 respectively.
Further expansions are in the “early development stage”, according to Sempra.
To contact the author, email jov.onsat@rigzone.com
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