Posted on July 22, 2024
Sempra Infrastructure, a subsidiary of Sempra, announced that Port Arthur LNG Phase 2 and Bechtel Energy (Bechtel) have signed a fixed-price engineering, procurement and construction (EPC) contract for the Port Arthur LNG Phase 2 project under development, about 90 miles east of Houston, in Port Arthur, Texas.
“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,” said Justin Bird, CEO of Sempra Infrastructure. “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.”
“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,” said Paul Marsden, President of Bechtel 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.”
As part of the EPC contract, Bechtel will perform the detailed engineering, procurement, construction, commissioning, startup, performance testing and operator training activities for the project. The scope of the agreement also includes the ability to conduct pre-final investment decision work to better assure project cost and schedule certainty.
The proposed Port Arthur LNG Phase 2 project is competitively positioned and is under active marketing and development. The project received authorization from the Federal Energy Regulatory Commission in September 2023 and is expected to include two liquefaction trains capable of producing approximately 13 Mtpa of LNG, which would increase the total liquefaction capacity of the facility from approximately 13 Mtpa to up to 26 Mtpa.
The Port Arthur LNG Phase 1 project is currently under construction and consists of trains 1 and 2, as well as two LNG storage tanks and associated facilities. Construction of the project continues to progress, and the expected commercial operation dates for train 1 and train 2 are 2027 and 2028, respectively.
In June, Sempra Infrastructure and a subsidiary of 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. In December 2022, Port Arthur LNG Phase 2 and INEOS also entered into a non-binding agreement for an offtake capacity of .2 Mtpa from the project.
The development of the Port Arthur LNG Phase 2 project remains subject to a number of 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.
