US player picks up work on second phase of LNG export terminal in Texas

Sempra Infrastructure, a subsidiary of North America’s energy infrastructure company Sempra, has inked a fixed-price contract for a planned expansion project to double the natural gas liquefaction capacity of an export terminal in Southeast Texas, United States. Thanks to this, Bechtel Energy (Bechtel), a U.S.-headquartered engineering, construction, and project management firm, will undertake engineering, procurement, and construction (EPC) activities for liquefied natural gas (LNG) Phase 2 project under development in Port Arthur.

Under the EPC contract, Bechtel will perform the detailed engineering, procurement, construction, commissioning, startup, performance testing, and operator training activities for the Port Arthur LNG Phase 2 project. In addition, the scope of the agreement entails the ability to conduct pre-final investment decision (pre-FID) work to ensure better project cost and schedule certainty.

Paul Marsden, President of Bechtel, commented: “We are excited for the opportunity to advance our partnership with Sempra Infrastructure on the Port Arthur LNG Phase 2 project, a vital project that will play a crucial role in meeting the world’s increasing need for cleaner and more reliable energy. This partnership positions Bechtel and Sempra Infrastructure to not only deliver a transformative energy infrastructure project but also brings additional significant economic growth and development opportunities to the local community.”

Moreover, the proposed Port Arthur LNG Phase 2 project, which received authorization from the Federal Energy Regulatory Commission (FERC) in September 2023, is said to be competitively positioned. The project, currently under active marketing and development, is envisioned to encompass two liquefaction trains capable of producing approximately 13 million tons per annum (mtpa) of LNG, boosting the total liquefaction capacity of the facility to up to 26 mtpa.

Justin Bird, CEO of Sempra Infrastructure, remarked: “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. Building on the success of Port Arthur LNG Phase 1, which is currently under construction, the Phase 2 project is expected to further enhance the supply of secure, abundant and reliable U.S. natural gas to customers around the globe.”

Furthermore, the Port Arthur LNG Phase 1 project, which is currently under construction, consists of trains 1 and 2, two LNG storage tanks, and associated facilities. According to Sempra, progress continues to be made in its construction, thus, the targeted commercial operation timelines for train 1 and train 2 are 2027 and 2028, respectively.

The natural gas liquefaction and export terminal in Jefferson County has direct access to the Gulf of Mexico via the Sabine-Neches ship channel. Port Arthur LNG Phase 1 is a joint venture project between Sempra Infrastructure and ConocoPhillips and has long-term, fully subscribed capacity with ConocoPhillips, RWE Supply and Trading, PKN Orlen, INEOS, and Engie.

Last month, Sempra and Aramco signed a non-binding heads of agreement, contemplating the purchase of 5 mtpa of LNG and a 25% equity investment in the Port Arthur LNG Phase 2 project, which followed the deal from December 2022, when Port Arthur LNG Phase 2 and INEOS also entered into a non-binding agreement for an offtake capacity of 2 mtpa from the project.

While the EPC award is a significant step toward taking FID, the development of the Port Arthur LNG Phase 2 project remains subject to several risks and uncertainties, including completing the required commercial agreements, securing and/or maintaining all necessary permits, obtaining financing, and reaching a final investment decision, among other factors.

Sempra is set on moving forward with infrastructure projects within its flagship Port Arthur Energy Hub to address the rising demand for lower-carbon fuels and carbon intensity reduction, which includes the proposed Titan carbon sequestration project.