Port Arthur LNG, a Texas-based natural gas liquefaction and export terminal, will add up to four liquefaction trains in Phase 1 and Phase 2 of the project.
Aramco and Sempra executed a non-binding heads of agreement (HoA) for the offtake of 5 million tons per annum (mtpa) of LNG over a 20-year term from the Port Arthur LNG Phase 2 expansion project in the Texas Gulf Coast. The HoA considers Aramco’s 25% stake in project-level equity for Phase 2. The partners expect to sign a binding LNG sale and purchase agreement with equity terms similar to those outlined in the HoA.
“We are excited to take this next step into the LNG sector,” said Nasir K. Al-Naimi, President of Aramco Upstream. “As a potential strategic partner in the Port Arthur LNG Phase 2 project, Aramco is well-placed to grow its gas portfolio with the aim of meeting the world’s growing need for lower-carbon sources of energy. This agreement is a major step in Aramco’s strategy to become a global LNG player.”
Sempra’s Port Arthur LNG Phase 1 is under construction and consists of the first two liquefaction trains and two LNG storage tanks and related facilities. The Phase 2 project will expand the site to include up to two additional trains with a combined production capacity of up to 13 mtpa.
“The planned expansion of Port Arthur LNG would help facilitate the broad distribution of U.S. natural gas across global energy markets,” said Jeffrey W. Martin, Chairman and CEO of Sempra. “By expanding the global reach of the Port Arthur LNG facility, we have the opportunity to improve energy security, while providing a lower-carbon alternative to coal for electricity production.”
The liquefaction and export terminal resides within Sempra Infrastructure’s Port Arthur Energy Hub and may expand to eight trains upon completion. The company is currently working on infrastructure projects for the Hub, including the proposed Titan Carbon Sequestration project to reduce the carbon intensity of Port Arthur LNG’s operations.
Earlier this month, subsidiaries of Aramco and NextDecade completed a non-binding HoA for a 20-year LNG purchase and sale agreement for offtake from Train 4 at Rio Grande LNG. Once the terms of the binding agreement are settled, NextDecade is targeting a final investment decision (FID) on Train 4 in the latter half of 2024.
Aramco plans to purchase 1.2 mtpa of LNG for 20 years on a free-on-board basis with price indexed to the Henry Hub. The Train 4 FID, prior to its planned finalization in late 2024, is subject to the completion and signing of an engineering, procurement, and construction contract, receiving commercial support, and obtaining the proper financing to build Train 4 and related infrastructure.
In April 2024, Aramco granted engineering, procurement, and construction contracts worth $7.7 billion to SAMSUNG Engineering Company, GS Engineering & Construction Corp., and Nesma & Partners for a major expansion of its Fadhili Gas Plant in eastern Saudi Arabia—the Fadhili Gas Plant Increment Project. The increase in the plant’s processing capacity, from 2.5 to up to 4 billion standard cubic feet per day, will help the company reach its goal to increase gas production by more than 60% by 2030 in comparison to 2021 levels.