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Bechtel begins construction on $13bn LNG terminal

Posted on September 18, 2023

US-based engineering and construction heavyweight, Bechtel, has commenced preliminary construction activities on the first phase of Sempra’s Port Arthur LNG export initiative in Texas, a project estimated to be worth around $13 billion.

Sempra Infrastructure, a subsidiary of Sempra, gave the green light for the first phase of the export project on March 20, after securing a final investment decision. This phase of the initiative has successfully garnered 10.5 Mtpa in binding long-term agreements, revealing a promising start with full subscription.

An array of long-term accords had previously been established by Sempra Infrastructure, partnering with several notable companies, including ConocoPhillips, Engie, and RWE, amongst others, to solidify the project’s foundations.

ConocoPhillips not only entered into a 20-year LNG Sale and Purchase Agreement (SPA) for 5 million tonnes of LNG but also invested as a shareholder in the project. Meanwhile, an infrastructure fund overseen by KKR is set to procure a non-controlling, 49% indirect stake in the initial phase of the Port Arthur LNG project, as per details from Sempra.

Looking ahead, the commercial operation timelines for the two trains involved are delineated for 2027 and 2028, respectively. The role of Bechtel in this pivotal project extends to an EPC (Engineering, Procurement, and Construction) contract, encompassing the development of two trains boasting a cumulative capacity of approximately 13 million tonnes per annum, alongside the construction of two storage tanks with a 160,000 cbm holding capacity.

In addition to spearheading the construction, Bechtel has entrusted subcontracts to firms such as Air Products, Elliott, and Great Lakes Dredge & Dock, facilitating a collaborative effort to bring the Port Arthur LNG contracts to fruition. This substantial development project, evidencing a consortium of significant partnerships, marks a significant step forward in enhancing LNG export infrastructure in Texas.

About the Project

Port Arthur LNG is a proposed natural gas liquefaction and export terminal in Southeast Texas (near Sabine Pass, in Port Arthur) with direct access to the Gulf of Mexico. At full capacity, the facility will include two natural gas liquefaction trains capable of producing, under optimal conditions, up to approximately 12.4 million tonnes per annum for export around the world.

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 tonnes per annum (Mtpa). Total capital expenditures for the Port Arthur Phase 1 project are estimated at $13 billion.

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