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    Sempra in Port Arthur LNG deal with ENGIE

Summary

Earlier ENGIE discussions to source LNG from the US were hampered by French environmental concerns. [Image credit: Sempra Infrastructure]

by: Dale Lunan

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Sempra in Port Arthur LNG deal with ENGIE

Sempra Infrastructure said December 6 it had entered into a 15-year sale and purchase agreement (SPA) with French multinational utility ENGIE for about 875,000 metric tons/year of LNG from the planned first phase of its Port Arthur LNG project in Texas.

The LNG, which will be delivered on a free-on-board basis, will be sourced entirely from natural gas which has been certified by an independent third-party in accordance with environmental, social and governance (ESG) performance criteria. The SPA also provides a framework to explore ways to reduce the carbon intensity of LNG produced at Port Arthur Phase 1 through greenhouse gas emission reduction, mitigation strategies and a continuous improvement approach.

In 2020, ENGIE was forced to abandon negotiations with another US LNG project, NextDecade’s proposed Rio Grande LNG facility in Brownsville, Texas, over French government concerns surrounding methane emissions from that facility. The talks were revived earlier this year, leading to an agreement under which ENGIE will take 1.75mn mt/yr from Rio Grande.

“ENGIE is a leader in Europe’s energy transition and a great addition to our Port Arthur LNG customer portfolio,” Sempra Infrastructure CEO Justin Bird said. “We are excited to work with ENGIE to deliver reliable energy resources like LNG and contribute to the security of natural gas supply to their clients while supporting both companies’ ESG commitments.”

Sempra Infrastructure has finalised a fixed-price engineering, procurement and construction (EPC) contract with Bechtel for the 13.5mn mt/yr first phase of Port Arthur LNG and entered into long-term SPAs with ConocoPhillips and INEOS for 5mn mt/yr and 1.4mn mt/yr, respectively. It hopes to make a final investment decision on the $10.5bn first phase in Q1 2023.