Sempra announced that its subsidiary, Sempra Infrastructure Partners, LP (Sempra Infrastructure), will invest $13 billion after reaching a positive final investment decision (FID) for the development, construction, and operation of the Port Arthur LNG Phase 1 project in Jefferson County, Texas.
Sempra Infrastructure closed its joint venture with an affiliate of ConocoPhillips, as well as announced an agreement to sell an indirect, non-controlling interest in the project to an infrastructure fund managed by KKR. Additionally, Sempra Infrastructure announced the closing of the project’s $6.8 billion non-recourse debt financing, and the issuance of the final notice to proceed under the project’s engineering, procurement, and construction agreement.
“At Sempra, we believe bold, forward-looking partnerships will be central to solving the world’s energy security and decarbonization challenges,” said Jeffrey W. Martin, Chairman and Chief Executive Officer of Sempra. “With strong customers, top-tier equity sponsors in ConocoPhillips and KKR and a world-class contractor in Bechtel, this project has the potential to become one of America’s most significant energy infrastructure investments over time, while creating jobs and spurring continued economic growth across Texas and the Gulf Coast region.”
The Port Arthur LNG Phase 1 project is fully permitted and is designed to include two natural gas liquefaction trains, two liquefied natural gas (LNG) storage tanks, and associated facilities with a nameplate capacity of approximately 13 million tons per annum (Mtpa).
“Sempra’s selection of Port Arthur as the location for a new natural gas liquefication and export terminal is a strategic decision that will cement Texas’ position as the energy capital of the world,” said Texas Gov. Greg Abbott. “With a highly skilled workforce and business-friendly climate, and as a national leader in LNG exports, Texas is the prime location to expand LNG operations to unleash the United States’ full economic potential in such a critical industry. Expanding LNG is imperative to American energy security, and the State of Texas looks forward to working alongside Sempra to advance this mission and bring more jobs and greater opportunities to hardworking Texans.”
The long-term contractable capacity of approximately 10.5 Mtpa is fully subscribed under binding long-term agreements with strong counterparties—ConocoPhillips, RWE Supply and Trading, PKN ORLEN S.A., INEOS and ENGIE S.A., all of which became effective upon reaching FID. Sempra Infrastructure is also actively marketing and developing the competitively positioned Port Arthur LNG Phase 2 project, which is expected to have a similar offtake capacity to Phase 1.
