Sempra and Bechtel Partner on EPC Contract for Port Arthur LNG Phase 2

Sempra Infrastructure, a subsidiary of Sempra (NYSE: SRE) (BMV: SRE), has signed a significant agreement with Bechtel Energy (Bechtel) to move forward with the Port Arthur LNG Phase 2 project in Texas. This fixed-price contract outlines the Engineering, Procurement, and Construction (EPC) for the project, marking a major step towards its development.

Under the EPC contract, Bechtel will handle the detailed engineering, procurement, construction, commissioning, startup, performance testing, and operator training activities for the project. The agreement also encompasses pre-final investment decision work to ensure project cost and schedule certainty.

The proposed Port Arthur LNG Phase 2 project is strategically positioned and actively marketed. It received authorization from the Federal Energy Regulatory Commission in September 2023 and is set to include two liquefaction trains, each capable of producing approximately 13 Mtpa of LNG. This expansion will boost the facility's total liquefaction capacity from about 13 Mtpa to up to 26 Mtpa.

Justin Bird, CEO of Sempra Infrastructure, expressed excitement about reaching a significant milestone with Bechtel for the Port Arthur LNG Phase 2 development project. He emphasized confidence in their ongoing collaboration with Bechtel, a top-tier construction firm, to successfully advance the project. Bird highlighted that the Phase 2 project will build on the achievements of Phase 1, which is currently underway, aiming to boost the supply of secure and reliable U.S. natural gas to global customers. This expansion is expected to enhance Sempra’s capability to meet the growing demand for natural gas worldwide.

Paul Marsden, President of Bechtel Energy, expressed enthusiasm about advancing the partnership with Sempra Infrastructure on the Port Arthur LNG Phase 2 project. He underscored the project's importance in addressing the global demand for cleaner and more reliable energy. Marsden highlighted that this collaboration not only aims to deliver a transformative energy infrastructure project but also promises substantial economic growth and development for the local community. He emphasized the dual benefit of the project: enhancing energy infrastructure while fostering local economic opportunities.

Currently under construction, the Port Arthur LNG Phase 1 project comprises trains 1 and 2, along with two LNG storage tanks and associated facilities. Construction is progressing, with commercial operation dates for train 1 and train 2 anticipated in 2027 and 2028, respectively.

In June, Sempra Infrastructure and a subsidiary of Aramco signed a non-binding Heads of Agreement for the purchase of 5 Mtpa of LNG and a 25% equity investment in the Port Arthur LNG Phase 2 project. Additionally, in December 2022, Port Arthur LNG Phase 2 entered into a non-binding agreement with INEOS for an offtake capacity of 0.2 Mtpa from the project.

The development of the Port Arthur LNG Phase 2 project is subject to various risks and uncertainties, including finalizing commercial agreements, securing necessary permits, obtaining financing, and reaching a final investment decision.