ConocoPhillips, Sempra Enter Offtake Agreement for Port Arthur LNG Phase II

ConocoPhillips and Sempra Infrastructure signed a 20-year sale and purchase agreement for 4 MTPA of LNG from the Port Arthur LNG Phase 2 (PALP 2) development project in Jefferson County, TX. The PALP 2 development project will feature two liquefaction trains that produce approximately 13 MTPA of LNG. This phase increases the Port Arthur LNG facility’s total liquefaction capacity to about 26 MTPA. Future phases are in the early development stage.

"ConocoPhillips is pleased to extend our partnership with Sempra Infrastructure to Port Arthur LNG Phase 2, where we will be a major offtaker," said Ryan Lance, Chairman and CEO, ConocoPhillips. "This advances our global LNG portfolio strategy as we build a flexible and reliable LNG supply network to meet growing energy demand."

Sempra Infrastructure also selected Bechtel to execute the engineering, procurement, and construction for the Port Arthur LNG Phase 2 facility. Despite progress and heavy market interest, the project is subject to numerous risks/uncertainties, such as completing the required commercial agreements, securing necessary permits, obtaining financing, reaching a final investment decision (FID), etc. The company targets a Phase 2 FID in 2025.

Port Arthur LNG Phase II | Image Credit: Sempra Infrastructure

"The role of U.S. LNG in meeting the energy-security needs of America's allies continues to grow," said Jeffrey W. Martin, Chairman and CEO, Sempra. "That’s why we’re excited to extend our partnership with ConocoPhillips to expand the Port Arthur LNG facility. This next phase reflects both companies' shared view of the opportunity to connect American producers of natural gas with growing markets overseas, while also driving economic growth and job creation here at home."

Previously, Sempra Infrastructure and ConocoPhillips started their cooperation on the Port Arthur LNG Phase 1 project, in which ConocoPhillips holds a 30% equity stake and obtained 5 MTPA in offtake capacity for 20 years. Phase 1 is presently under construction, featuring two LNG storage tanks and two liquefaction trains, expected to enter commercial operations in 2027 and 2028, respectively.

In September 2023, the Federal Energy Regulatory Commission granted project approval and the Department of Energy authorized exports in May 2025. Export authorization allows LNG shipping to non-free trade agreement countries. Major permitting for the Phase 2 project is secured.

Aramco & Sempra at Port Arthur

In late June 2024, Aramco and Sempra executed a non-binding head of agreement (HoA) for the offtake of 5 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.

ConocoPhillips’ Optimized Cascade

Earlier this month, Coastal Bend LNG, a planned 22.5 MTPA natural gas liquefaction and export facility in Ingleside, TX, selected ConocoPhillips’ Optimized Cascade process technology for commercial start-up. Situated along Texas’ Gulf Coast, the planned development includes several natural gas liquefaction trains, cogeneration capability, LNG storage tanks, and export facilities.

ConocoPhillips’ proprietary liquefaction technology recovers heavy hydrocarbons to utilize as a separate product, which prevents freezing and may also remove nitrogen if necessary. Optimized Cascade leverages three multi-staged, cascaded refrigerant circuits, brazed aluminum heat exchangers, and insulated cold box modules to effectively liquefy natural gas, while the company’s installation method reduces cost and increases the LNG plant’s efficiency.