Total, Sempra Ink LNG Projects Framework
Sempra Energy and Total announced November 5 they have agreed a framework for co-operation in the development of North American LNG export projects.
They have signed a memo of understanding that covers continuing development of the Cameron LNG project in Louisiana, US and Energia Costa Azul (ECA) project in Baja California, Mexico.
The MoU between Sempra Energy and Total contemplates Total potentially contracting for up to some 9mn metric tons/year of LNG offtake across Sempra Energy's LNG export development projects on the US Gulf Coast and West Coast of North America, specifically Cameron LNG Phase 2 and ECA LNG. Total, which already has 16.6% equity in Cameron, also may acquire an equity interest in ECA LNG.
Sempra CEO Jeffrey Martin said that his company has a long-term goal of developing more than 45mn mt/yr of LNG export capacity in North America: "That is why our relationship with Total is so important. We plan to leverage the competitive strengths of both companies to accelerate development of North American LNG exports to global markets."
"This relationship with Sempra Energy will support our goal of building a diverse portfolio of LNG supply options that offers our customers flexibility, reliability and low-cost North American natural gas," said Total CEO Patrick Pouyanne, adding that Mexican west coast export capacity would "benefit from synergies with existing infrastructure and from a significant shipping cost advantage for customers in Asia."
Total is not putting all its eggs in one basket: it also wants stakes in all future Novatek-owned LNG projects in the Yamal or Gydan peninsulas, of which the first, Yamal LNG, is ramping up now.
The $10bn phase 1 of the Cameron project includes three liquefaction trains with some 14mn mt/yr of export capacity under construction in Louisiana. Commissioning of the first train is now under way and all three trains are expected to be producing LNG in 2019. Phase 2 of the Cameron LNG project, previously authorised by the US regulator Federal Energy Regulatory Commission, encompasses up to two additional liquefaction trains and up to two additional LNG storage tanks with approximately 9mn mt/yr capacity. ECA Phase 1 is a one-train facility with an expected total export capacity of 2.5mn mt/yr, using the existing LNG receiving terminal's tanks, loading arms and berth, while its phase 2 would have 12mn mt/yr more capacity.
Ultimate participation by Total remains subject to finalisation of definitive agreements, among other factors, including customer commitments and regulatory approvals.
Sempra has reached agreements with a contractor and with an activist shareholder, regarding delays to construction at Cameron - originally due to have opened this year but now not opening until 2019.