Aramco and Sempra Energy Sign HOA for Port Arthur LNG Phase 2 Equity and Offtake

Aramco, one of the world's leading integrated energy and chemicals companies, and Sempra, a top energy infrastructure company in North America, have taken a significant step forward in their collaboration. On June 26, 2024, their subsidiaries executed a non-binding Heads of Agreement (HoA) for a 20-year sale and purchase agreement (SPA) to offtake 5.0 million tonnes per annum (Mtpa) of liquefied natural gas (LNG) from the Port Arthur LNG Phase 2 expansion project. This agreement also includes Aramco's potential 25% participation in the project's equity at the Phase 2 level.

The parties anticipate finalizing binding agreements for the LNG SPA and definitive equity terms that align closely with those outlined in the HoA. These agreements will be subject to several conditions.

Nasir K. Al-Naimi, President of Aramco Upstream, expressed enthusiasm about this development, highlighting that the agreement marks a pivotal step in Aramco's strategy to become a leading global LNG player. He commented, "We are thrilled to advance into the LNG sector with this initiative. As a strategic partner in the Port Arthur LNG Phase 2 project, Aramco is ideally positioned to expand its gas portfolio, addressing the world's increasing demand for lower-carbon energy sources. This agreement marks a significant milestone in Aramco’s strategy to become a leading global LNG player."

Jeffrey W. Martin, Chairman and CEO of Sempra, emphasized the strategic importance of the Port Arthur LNG expansion. He remarked, "The proposed expansion of Port Arthur LNG will enable the widespread distribution of U.S. natural gas in global energy markets. By enhancing the international reach of the Port Arthur LNG facility, we can bolster energy security and offer a lower-carbon alternative to coal for electricity generation."

Port Arthur LNG is strategically located in Southeast Texas with direct access to the Gulf of Mexico. The current Phase 1 project comprises two liquefaction trains, two LNG storage tanks, and associated facilities. The Phase 2 project is a significant expansion that aims to add up to two more trains, increasing the facility's production capacity to 13 Mtpa. This positions Port Arthur LNG to potentially become one of the world's largest LNG export facilities, with an ultimate capacity of up to eight trains.

At the core of Sempra Infrastructure's prominent Port Arthur Energy Hub, the Port Arthur LNG facility has the potential to expand to a total of eight liquefaction trains. This expansion would establish it as one of the world's leading LNG export terminals. The facility is anticipated to significantly contribute to global energy security and resilience. Additionally, Sempra Infrastructure is proactively advancing various projects within the Port Arthur Energy Hub to meet the increasing demand for lower-carbon fuels and to reduce carbon intensity. One such initiative is the proposed Titan Carbon Sequestration project, which aims to capture and store carbon emissions, further supporting the transition to cleaner energy solutions.