Final decision nears for Port Arthur LNG Phase 1 construction following latest long-term sales agreement

Published 1:49 pm Thursday, January 26, 2023

Sempra Infrastructure, a subsidiary of Sempra, announced this week it has entered into a long-term sale and purchase agreement with PKN ORLEN S.A., which recently acquired the Polish Oil & Gas Company, for the supply of liquefied natural gas from the Port Arthur LNG Phase 1 project under development in Jefferson County.

With this agreement, the projected LNG off-take capacity for the Phase 1 project is now fully subscribed under binding long-term agreements.

PKN ORLEN has agreed to purchase approximately 1 million tonnes per annum of LNG from the Port Arthur LNG Phase 1 project on a free-on-board basis for 20 years.

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CEO Justin Bird said Sempra Infrastructure is excited to partner with PKN ORLEN, Central Europe’s largest energy group.

“With the long-term off-take capacity for Phase 1 now sold under binding agreements, we expect to reach FID later this quarter and commence construction on the Port Arthur LNG Phase 1 project to help meet the increasing demand for LNG across Europe and the rest of the world,” Bird said.

Daniel Obajtek, CEO of PKN ORLEN said this is an important step towards strengthening PKN ORLEN’s position as a cornerstone of crude and fuel supply security in Central and Eastern Europe.

“Already last year, during a very tense situation on the EU energy market, the United States became one of the main suppliers of natural gas to Poland,” Obajtek said. “By establishing a partnership with Sempra Infrastructure, we are increasing the diversification of our import portfolio and we are securing additional volumes of natural gas, which will be used both to provide for the needs of the Polish customers and to enhance PKN ORLEN’s presence in the international energy market.”

Sempra Infrastructure previously announced long-term agreements with ConocoPhillips, INEOS, ENGIE and RWE for the sale and purchase of LNG from the proposed Phase 1 project.

In aggregate, Port Arthur LNG Phase 1 is now fully subscribed with 10.5 Mtpa under binding long-term agreements, official said.

The company is focused on completing the remaining steps necessary to achieve its goal of making a final investment decision for the Port Arthur LNG Phase 1 project in the first quarter of this year, with first cargo deliveries expected in 2027.

The Port Arthur LNG Phase 1 project is permitted and expected to include two natural gas liquefaction trains and LNG storage tanks and associated facilities capable of producing, under optimal conditions, up to approximately 13.5 Mtpa of LNG.

A similarly sized Port Arthur LNG Phase 2 project is also competitively positioned and under active marketing and development.

Development of the Port Arthur LNG projects is contingent upon completing the required commercial agreements, securing and/or maintaining all necessary permits, obtaining financing, and reaching a final investment decision, among other factors.